Electric car company Tesla attracted attention with its Bitcoin (BTC) purchase last year. Now, Tesla has announced that it sold 75 percent of its Bitcoin assets in the last quarter. The electric vehicle company said it had raised $936 million in cash by selling its assets, but its profitability was affected. Tesla had purchased $1.5 billion worth of Bitcoin in early 2021 at an average price of around $31,000. Tesla currently has $218 million in Bitcoin left.
Tesla sold Bitcoin: Only $218 million left
The electric car giant announced in its latest quarterly report, released late Wednesday, that it has converted “about 75 percent” of its Bitcoin holdings into fiat money. As of June 30, the firm held just $218 million in digital assets, up from more than $1.2 billion in March. The report stated that the BTC sale “added $936 million in cash” to the company’s balance sheet. While Tesla did not clarify whether he was selling Bitcoin at lower prices than when he first bought it, he noted that Bitcoin is a “disorder” that negatively affects profitability.
Tesla CEO Elon Musk announced on an earnings call today that the company is selling “a portion” of its Bitcoin amid liquidity concerns caused by China’s COVID lockdowns. He stated that Tesla is “definitely open to increasing Bitcoin holdings in the future.” He added that the firm did not reduce its Dogecoin holdings.
Did Tesla sell it at a loss?
As we reported on Kriptokoin.com, Musk first announced his support for Bitcoin by adding the name of the best cryptocurrency to his Twitter profile on January 29, 2021. A few days later, Tesla announced that he had received $1.5 billion worth of Bitcoin and had begun accepting Bitcoin payments. Tesla bought Bitcoin at an average price of about $31,700. The exact date the company sold its assets and the number of coins it sold are unknown. However, BTC experienced a sharp decline in the second quarter. It fell from $47,000 to $19,000 from March 31 to June 30, suggesting that the company may have sold at a loss. Finally, Tesla’s report included the following statements:
Quarter-end cash, cash equivalents and short-term securities increased by $902 million, respectively, to $18.9 billion in the second quarter, mainly driven by free cash flow of $621 million. Partially offset by debt repayments of $402 million. By the end of Q2, we had converted about 75 percent of our Bitcoin purchases into fiat currency. Conversions in the second quarter added $936 million in cash to our balance sheet.
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