Tesla revealed that it still held bitcoins with a market value of $222 million after selling 75% of its crypto holdings. The company recorded realized gains of $64 million on its recent conversion of bitcoins into fiat currency.
Tesla earns $64 million from selling Bitcoin
Tesla Inc. filed its second quarter report with the United States Securities and Exchange Commission (SEC) on Monday.
The company explained that it had converted approximately 75% of its bitcoin holdings in fiat currency, as Bitcoin.com News reported last week. The BTC the conversion added $936 million in cash to the electric car company’s balance sheet.
Tesla informed the SEC that in the second quarter:
We recorded impairment losses of $170 million resulting from changes in the carrying value of our bitcoin and gains of $64 million on certain conversions of bitcoin into fiat currency by us.
Tesla originally purchased $1.5 billion worth of bitcoins in Q1 2021. During the same quarter, the company sold BTC worth $272 million. Bitcoin price fluctuated between the $32,000 level and the $59,000 level in the first quarter of 2021.
The electric car company said in the SEC filing that it realized gains of $128 million from the conversion of its BTC in fiat currency in the first quarter of 2021. In addition, the company had $23 million and $50 million in bitcoin impairments in the second quarter of 2021 and the first half of 2021, respectively.
Tesla’s digital assets consist primarily of Bitcoin
In its Monday SEC filing, Tesla clarified that it purchased bitcoin worth $1.5 billion in the first quarter of 2021. In addition, it received “an intangible amount” of digital assets. during the first half of this year.
Although Tesla did not name other crypto assets it holds, the company has accepted the same cryptocurrency dogecoin (DOGE) for certain commodities since January.
The book value of the digital assets owned by Tesla was $218 million at the end of the second quarter, its balance sheet shows it. The electric car company has developed:
The fair market value of these digital assets held as of June 30, 2022 was $222 million.
On June 30, the price of BTC was hovering around $20,000, after briefly dropping to $18,784. At the time of writing, BTC is trading at $21,869, based on data from Bitcoin.com Markets.
Tesla CEO Elon Musk said during the company’s second-quarter earnings call last week that the company had sold most of its BTC due to concerns “about the company’s overall liquidity, given the Covid shutdowns in China.” Noting that Tesla didn’t sell any dogecoin, Musk pointed out, “We’re certainly open to increasing our bitcoin holdings in the future, so this shouldn’t be taken as a verdict on bitcoin.”
What do you think about Tesla still holding $222 million worth of bitcoins? Let us know in the comments section below.
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