Tesla is “Certainly Open to Increasing Its Bitcoin Holdings” as DOGE gains market share
The bulk of Tesla’s bitcoin holdings were sold. The Elon Musk-founded electric vehicle business currently has just $218 million worth of the benchmark cryptocurrency, down from a staggering $1.2 billion.
In an earnings report released after the market close on Wednesday, Tesla said it had sold 75 percent of its bitcoin holdings in the second quarter, adding $936 million to its balance sheet.
Tesla said that “bitcoin impairment” negatively affected its profits. By selling BTC at an average price of nearly $29,000 per coin earlier in the quarter, the EV giant avoided a significant impairment penalty. As of the 30th of June, the company’s BTC holdings have decreased to $218 million from over $1.26 billion in March. The crypto market instantly responded to the news of Tesla’s sell-off.
Musk Open To Future BTC Purchases
Given the uncertainties surrounding China’s lockdowns, Elon Musk said during a prior earnings call that Tesla had sold “a lot” of BTC to improve its cash position.
When questioned by investors whether he considered bitcoin a long-term investment, Musk said that the cryptocurrency was only a “sideshow to the sideshow” since Tesla’s primary objective is “to hasten the advent of sustainable energy.”
Musk and Tesla’s relationship with bitcoin has been complex. In January 2021, when he added bitcoin to his Twitter profile, Tesla’s CEO began to advocate for the cryptocurrency in earnest. Tesla said days later that it would accept bitcoin as payment for its vehicles after acquiring $1.5 billion worth of the leading cryptocurrency.
Musk reversed his position on bitcoin in May of last year, announcing that Tesla would no longer accept it as payment due to worries about the energy consumption of BTC mining.
Musk reiterated this week that the sale was not a judgement on bitcoin and that Tesla is “absolutely open to raising [its] Bitcoin holdings in the future.” Additionally, the business has not sold its Dogecoin (DOGE) holdings.