Tesla Revealed They Still Hold Bitcoin Worth USD 222 Million In Market. Tesla revealed they still hold Bitcoin worth USD 222 million in market value on the company’s balance sheet after selling 75 percent of its Bitcoin holdings. The company recorded a realized gain of USD 64 million on the recent conversion of bitcoin to fiat currency.
The company explained it converted about 75 percent of its bitcoin holdings into fiat currency last week. The BTC conversion added USD 936 million in cash to the electric car company’s balance sheet.
“We recorded an impairment loss of USD 170 million as a result of the change in the carrying value of our bitcoins and a gain of USD 64 million from certain conversions of bitcoin to fiat currency by us,” the company said. 7/2022).
Tesla initially bought bitcoin worth USD 1.5 billion in the first quarter of 2021. In the same quarter, the company sold USD 272 million worth of BTC. The bitcoin price at that time fluctuated between the level of USD 32,000 and the level of USD 59,000 in Q1 2021.
The electric car company stated in its SEC filing that it realized a $128 million gain from converting BTC into fiat currency in the first quarter of 2021. Additionally, the company had an impairment loss of $23 million and $50 million on bitcoin in the second quarter of 2021.
Tesla’s Digital Assets Are Made Up Most Of Bitcoin
In a filing with the SEC, Tesla clarified that it purchased $1.5 billion worth of bitcoin in Q1 2021. Additionally, it received an “immaterial amount” of digital assets during the first half of 2022.
While Tesla did not mention any other crypto assets it holds. The company has been receiving cryptocurrencydogecoin(DOGE) memes for some merchandise since January.
Tesla Revealed They Still Hold Bitcoin Worth USD 222 Million In Market. Based on the company’s balance sheet, the carrying value of Tesla’s digital assets held was $218 million at the end of the second quarter.
Tesla CEO Elon Musk said during the company’s Q2 earnings call last week the company sold most of its BTC due to concerns “about overall liquidity for the company, given the Covid shutdown in China”.
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Previously, Elon Musk’s electric vehicle maker Tesla had sold about 75 percent of its Bitcoin holdings by the end of the 2nd quarter of 2022, Tesla said in its second-quarter earnings statement on Wednesday, July 20, 2022.
The company said the sale added USD 936 million or around Rp 14 trillion in cash to its balance sheet.
“By the end of the second quarter, we had converted approximately 75 percent of our Bitcoin purchases into fiat currency,” the company said, quoted from CNBC, Thursday (21/7/2022).
Tesla CEO Elon Musk explained the reason the company sold many bitcoin holdings was because it wasn’t sure when China’s Covid lockdown would ease.
“So it’s important for us to maximize our cash position. This shouldn’t be considered a verdict on bitcoin. It’s just that we’re concerned about the company’s overall liquidity, given the Covid shutdown in China, and we haven’t sold our dogecoin yet,” Musk said.
However, when asked about bitcoin’s potential as an inflation hedge on earnings calls, Musk said Tesla’s main goal was to accelerate the transition to sustainable energy, and called bitcoin a “show for spectacle”.
This is a quick setback for Tesla and Elon Musk, who were heavy crypto proponents during last year’s rise. Musk himself often tweets about various digital currencies.
The price of bitcoin has lost half its value in the last four months during the so-called “crypto winter.” For Tesla, the fair market value of its bitcoin holdings stood at $2.48 billion in the first quarter of 2021 and ended the year at around $2 billion.
The company did not say at what price it sold or provide a measure of its decline, but bitcoin started the second quarter close to $46,000 and ended below $19,000.
Tesla Revealed They Still Hold Bitcoin Worth USD 222 Million In Market. In May last year, Musk said Tesla had stopped accepting bitcoin for car purchases because of the environmental impact of crypto mining, but he added the company “will not sell any bitcoins.”
A week later that year, he tweeted an emoji showing the company had a “diamond hand” when it came to bitcoin investing, and he praised “our coin master”.