Elon Musk-owned electric vehicle-making company Tesla has sold a significant amount of its Bitcoin holdings, the firm said in a statement, "given the uncertainty of the COVID lockdowns in China." He added, however, that Tesla is open to boosting its bitcoin exposure in the future, and "this should not be taken as some verdict on Bitcoin." Reporting its earnings for Q2, the company said that it had sold 75 percent of its Bitcoin holdings, an investment that helped the world's now-largest cryptocurrency by market cap, to achieve that position and surge rapidly in terms of value.
The price of bitcoin fell about 1.7% to US$23,300 immediately following the release of the earnings report but rebounded to its previous levels after Musk made his comments on the earnings call. "As of the end of Q2, we have converted approximately 75 percent of our Bitcoin purchases into fiat currency," said Tesla in a shareholder letter on Wednesday, as part of its company earnings report. "Conversions in Q2 added US$936M of cash to our balance sheet," it said. Tesla ended the second quarter with just US$218 million in bitcoin (BTC), down from US$1.26 billion in the previous three quarters.
The company held about 42,000 bitcoin heading into the quarter. Bitcoin ended the second quarter at a price of about US$18,700, meaning Tesla avoided a substantial impairment charge on its holdings by selling earlier in the quarter. Elon Musk's company further added that its Q2 year-on-year operating income and profitability were impacted by the impairment of Bitcoin. In Q1 2021, the statement from the company had shown cash flow from digital assets worth US$272 million.
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