Tesla revealed on July 20 that it sold 75% of its Bitcoin (BTC) holdings in the second quarter of 2022. The electric car manufacturer said the latest bitcoin transactions brought $936 million to its balance sheet.
Tesla sold $936 million in Bitcoin
Reports predict that Tesla’s Bitcoin holdings will record an impairment loss of more than $400 million due to the recent crash of the crypto market.
The chief executive officer Elon Musk addressed the reason for the sale, which he blamed to be the uncertainty about lockdowns due to Covid-19 in China, which has created production challenges for the company.
Meanwhile, he added that he was only concerned about his company’s overall liquidity and thought it best to sell off its Bitcoin holdings to maximize the firm’s cash position. He also said that the company would replenish its Bitcoin holdings in the near future. Musk further pointed to the public not to see the decision as some form of a verdict on Bitcoin.
Bitcoin lost about 58% of its value in the second quarter, its biggest loss in over a decade. Meanwhile, the company said its revenue in the second quarter rose 42% year over year to $16.9 billion.
Tesla crypto adoption
Tesla’s operating income rose year-over-year to $2.5 billion, adding that bitcoin impairments and other reasons impacted the revenue. Tesla bought $1.5 billion worth of bitcoin in 2021 when the asset was trading at around $30,000.
The company later sold a 10% stake in the first quarter of 2021. Since then, it has not bought or sold shares until the second quarter of 2022. The electric car maker also briefly accepted payment for its vehicles in its flagship digital asset before abruptly halting the program due to environmental concerns.