Tesla’s decision to offload most of its Bitcoin (BTC) treasuries brought the company a sizable profit in the second quarter, even as crypto prices plunged in a bear market.
In the first six months of 2022, Tesla recorded $170 million in impairments “resulting from changes in the book value” of its Bitcoin holdings, according an official Form 10-Q filing with the United States Securities and Exchange Commission, or SEC. After sell 75% of its BTC reserve for dollars in the second quarter, the company made a realized gain of $64 million.
In finance, an impairment occurs when the fair value of an asset held by a business falls below the book value of the investment.
If you sell 75% of your bitcoin, you will only have 25% of your #bitcoin left.
— Michael Saylor⚡️ (@saylor) July 20, 2022
Tesla reported second-quarter earnings of $2.27 per share on revenue of $16.93 billion. Although profitability is down from the first quarter, it is up from levels a year ago. However, the company’s profitability has been affected by rising inflation and growing competition for battery cells.
The EV maker still has 10,800 BTC on its books, according to Bitcoin treasury bills. At a current price of around $22,000 BTC, Tesla’s digital assets are worth around $237 million.
Disclosure 10-K did not reveal any new information about Tesla’s digital asset strategy. However, the company said it could increase or decrease its holdings over time:
“As with any investment and consistent with how we manage fiduciary cash and cash equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on business needs and our vision. market and environmental conditions. ”