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Tesla sold 75% of their Bitcoin, Elon Musk insists that Dogecoin is still with him

Tesla_sold_75%_of_their_Bitcoin,_Elon_Musk_insists_that_Dogecoin

In the second quarter (Q2) of this year, Tesla sold 75% of its Bitcoins and got $936 million in cash. This is because the economy is in trouble and cryptocurrencies are falling apart.

Last year, Tesla put $1.5 billion into Bitcoin and said that it would be willing to accept Bitcoin as payment.

Elon Musk, the CEO of Tesla, told investors at the company’s second-quarter (Q2) earnings conference that the company sold off a lot of its Bitcoin because ” we were uncertain as to when the COVID lockdowns in China would alleviate”.

Because COVID lockdowns in China were hard to predict, it was important for us to make the most of our money. We are certainly open to increasing our Bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin,” he said.

Musk was worried about the company’s total cash flow because of the shutdowns in China.

He went on to say, ” And we have not sold any of our Dogecoin.”

Zachary Kirkhorn, Tesla’s Chief Financial Officer, said that the company converted most of its Bitcoin holdings to fiat currency for a realized gain, which was “offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the P&L included within restructuring and other”.

After being positive about Bitcoin for less than two months, Tesla stopped accepting it as a way to pay for its electric cars, citing concerns about the environment.

Musk then said that Tesla wouldn’t sell Bitcoin, but instead would use it to buy and sell things once mining moved to cleaner energy sources.

Tesla Makes $64M Selling Bitcoin, but Still Loses $170M in Impairment (Updated 27 July 2022)

Tesla had a great second quarter, with sales going up by 42%, but it still had to take a $170 million impairment loss.

Statistics from Bitcoin Treasuries show that in the first quarter of 2021, Tesla spent $1.5 billion to buy about 43,200 BTC. Then, in the same quarter, it sold 10% of its bitcoin for $272 million.

At the time, Tesla’s CFO Zach Kirkhorn said that the company was investing in bitcoin for the long term and that the sales were just an experiment to see how liquid and valuable bitcoin is as an alternative reserve asset.

But Tesla said this week that it sold 75% of its bitcoin in the second quarter of this year for $936 million.

In an SEC filing, the company said, “As with any investment and consistent with how we manage fiat-based cash and cash-equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on the needs of the business and our view of the market and environmental conditions,”

Accounting rules call digital assets “intangible assets with an indefinite life.” So, Tesla has to figure out how much bitcoin is worth at its lowest point during a quarter and report a loss if it goes below the price it paid for it.

In the same way, Tesla may make money if it sells its digital assets. During the six months that ended on June 30, the price of the asset was around $19,000, and the company that makes electric cars reported a $64 million gain from converting some BTC into regular cash.

Vetle Lunde, an analyst at Arcane Research, says that Tesla sold 29,060 BTC at an average price of $32,209. This left the company’s balance sheet with about 9,700 BTC, or $205.1 million.

Marcus Sotiriou, an analyst at GlobalBlock, says that the company’s sale of bitcoin during a drop in the stock market shows that it had to do so to manage risk and make money in a rising interest rate environment.

In any case, Tesla still has the second most BTC of any publicly traded company, behind Michael Saylor’s data analytics company MicroStrategy, which has 129,698 BTC, or $2.74 billion.

Elon Musk says that Tesla sold bitcoin to make more cash available

Elon Musk, CEO of Tesla, has been a big fan of cryptocurrencies for a long time, and his tweets had a big effect on the price of bitcoin last year. His words often had an effect on the markets, and Tesla’s crypto purchases were always watched.

Blockworks Research says that so far this year, the price of bitcoin is down 55%. At 1:15 a.m. ET on Tuesday, the price was $21,100. Varun Kumar, the CEO of Hashflow, says that the key cryptocurrency asset may have found its bottom at around $18,000.

he said: “Barring any exogenous shocks to the macroeconomic picture, it seems unlikely to go lower. That’s not to say that it can’t — but crypto has front-run other markets in terms of pricing an extremely negative global economic outlook.”

“I suspect, then, that like the 2018 bear market, we will range sideways and gradually upwards until the macro conditions improve. And when that happens, perhaps in a year’s time, we might be headed for another bull run.”

Musk said last week during a call about the company’s earnings that Tesla could buy bitcoin in the future. “It’s just that we were concerned about overall liquidity for the company, given Covid shutdowns in China,” he said, adding that his company hasn’t sold any of its dogecoin.

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