Elon Musk’s Tesla Has Sold 75% of Its Bitcoin Holdings – Decrypt

Tesla sold 75% of its Bitcoin, worth approximately $936 million, according to its Q2 earnings report.

In its after-market earnings announcement, the electric car manufacturer founded by Elon Musk said in a shareholder presentation that “Bitcoin impairment” had a negative impact on its profitability during the second quarter, when it posted $2.5 billion in operating income.

The crypto market immediately reacted to the news.

Bitcoin (BTC), which made it above $24,000 on Wednesday, dropped sharply right after markets closed at 4 p.m. Eastern Time. It was trading at $23,078.18 at the time of writing, down 2.5% in the last hour, according to CoinMarketCap.

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was also down 3% in the last hour following the news from Tesla’s earnings report.

Tesla and Musk have had an on-again, off-again relationship with Bitcoin.

The electric vehicle company invested $1.5 billion in Bitcoin in February 2021, after changing its investment policy in January to allow it to hold digital assets. It was seen as a very bullish move at the time. So much so that BTC hit what was then a new all-time high of $43,000.

Then, in May 2021, Musk seemed to sour on BTC as he announced that Tesla would stop accepting it as payment, citing concerns over the environmental impact of Bitcoin mining.

In its 2022 first quarter report, filed in April, TSLA wrote that it believes in Bitcoin’s “long-term potential of digital assets both as an investment and also as a liquid alternative to cash.”

But it also warned shareholders that price changes tend to impact its profitability, which now seems like a harbinger for Wednesday’s announcement.

“For example, in the first quarter of 2021, we recorded approximately $27 million of impairment losses resulting from changing to the carrying value of our Bitcoin and gains of $128 million on certain sales of Bitcoin by us,” the company wrote in its April 25 SEC filing.

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