Tesla’s Q2 2022 earnings call showed the electric car maker sold most of its Bitcoin holdings for nearly $1 billion. The company made a sizable profit despite the recent drop in cryptocurrency prices.
Tesla dumps 75% of its Bitcoin
During the second quarter, Tesla sold the majority of its Bitcoin holdings. Prior to the sale, Tesla was one of Bitcoin’s largest holders, and even assured that its purchase would demonstrate Bitcoin’s long-term viability.
The second quarter 2022 earnings call showed that in the first half of 2022, the electric car maker recorded impairments of $170 million due to changes in book value. An impairment loss occurs after the fair value of the asset owned by a company has fallen below the book value of the investment.
The official Form 10-Q filing with the United States Securities and Exchange Commission also showed that after the electric car maker sold 75% of its Bitcoin holdings, it made a realized gain of $64 million.
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Tesla’s second-quarter financial results also showed the company reported earnings per share of $2.27 and revenue of $16.93 billion. On the other hand, reported earnings during the first quarter were noticeably down from the first quarter. However, profitability was up from the previous year.
Tesla’s earnings have been hurt by rising inflation levels and increased competition for battery cells. As seen on Bitcoin Treasury Bonds, the electric vehicle maker holds approximately 10,800 BTC in its holdings. Tesla’s bitcoin holdings are currently worth around $237 million.
Tesla’s position on Bitcoin
Tesla CEO Elon Musk has explained why the electric car maker sold off its Bitcoin holdings. He said the company needed cash to maintain operations in Germany and the United States. Moreover, it also needed to increase its cash flow affected by COVID-19 related restrictions in China.
The recent 10-K disclosure filing did not provide any insight into Tesla’s digital asset strategy. However, the company said it will increase or decrease its crypto holdings in the future depending on business needs and the macro climate.
Musk also said the selloff should not be taken as a verdict on Bitcoin. Tesla’s Bitcoin sale drew mixed reactions from the crypto community, with Binance CEO Changpeng Zhao saying the sale was a drop in the bucket as up to $100 billion of Bitcoin are traded daily.
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