Tesla sold 75% Bitcoin holdings in Q2, worth $936 million
Electric car maker Tesla (TSLA) announced that it sold $936 million worth of its Bitcoins or 75% of its holdings in the second quarter. The company reported the disclosure in its earnings report on Wednesday.
“As of the end of Q2, we have converted about 75% of our Bitcoin purchases to fiat currencyTesla said in its second-quarter earnings report released Wednesday. The firm added $936 million worth of cash to its balance sheet.
Musk commented in the earnings call on Wednesday: “The reason we sold a bunch of our bitcoin holdings was because we were uncertain when the Covid lockdowns in China would ease, so it was important for us to maximize our cash position. This should not be taken as a verdict on bitcoin,” he added that “Tesla is open to increasing its crypto holdings in the future.”
Tesla ended the second quarter with Bitcoin holdings worth $218 million, down from $2 billion in the previous three quarters.
The fair market value of Tesla’s Bitcoin holdings reached $2.48 billion in the first quarter of last year and ended the year at around $2 billion. While the company did not mention the price at which it sold its Bitcoins or show the size of the drop in value, Bitcoin began the second quarter of this year at around $46,000 and ended below $19,000.
The firm had an estimate of 42,000 Bitcoins at the start of the second quarter. The sale of 75% of these BTC worth $936 million means Tesla’s average selling price was around $29,000 per Bitcoin.
Bitcoin ended the second quarter at a trading price of around $18,700. This means that Tesla avoided a significant write-down on its holdings by selling earlier in the quarter.
Last February, Tesla announced a purchase of the cryptocurrency for $1.5 billion using its balance sheet capital. Last March, the company announced that it would soon accept the most popular and largest cryptocurrency as a payment method for the purchase of its electric vehicles. The announcement sent the prices of most cryptocurrencies significantly higher and cemented Musk as a de facto crypto leader.
In April 2021, Tesla sold $272 million of its Bitcoin holdings during the first quarter to demonstrate to users that the crypto is a good investment. The firm said the sale of Bitcoins contributed $101 million to its bottom line (profitability) and accounted for a reduction in the company’s operating costs.
For the company, Bitcoin has proven to be a good place to put money that is not used for day-to-day operations and could get some return on it.
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