Elon Musk. photo: Shutterstock
In the latest earnings report, Tesla revealed that it converted approximately 75% of its Bitcoin into fiat currency at the end of the second quarter, as the company’s operating income took a negative impact as the asset’s price dropped.
According to the report, the conversion of Bitcoin to USD added $936 million to the company’s balance sheet. See below the historical movement of BTC and the drop in the last quarter.
The last candle in the chart above represents the quarter ending June 30, which was the worst for Bitcoin in over 10 years. The cryptocurrency’s price has seen a 56.27% drop from around $45,000 to around $19,000.
Second According to the db profile (@tier10k on Twitter), the average selling price of Tesla’s bitcoins should be around $29,000, while the company has invested $1.5 billion in BTC for the average price of $30,000 to $31,000 or so.
It is worth noting that, in March of this year, Elon Musk stated that he would not sell what he had in cryptocurrencies (he admitted to owning bitcoin, ether and dogecoin). In a discussion with Michael Saylor on Twitter about assets that would best serve as hedges against inflation, Musk defended investing in real estate and stocks in good companies, but said he would still keep his cryptos.
But that was about his personal investment portfolio, as for Tesla, the scenario is different. This isn’t even the first time the electric car maker has sold part of its bitcoins.
In April 2021, Tesla announced that it had sold $272 million worth of BTC. At the time, the company’s bitcoin position was at about 70% profit, and Elon Musk explained on Twitter that the Tesla sale served to “prove Bitcoin’s liquidity as an alternative to holding cash.” [dólares] on the balance sheet.”
Tesla spent $1.5 billion on bitcoin, but converted back to dollars on at least two different occasions the equivalent of $1.208 billion. As per the recent report, Tesla still holds $218 million in “digital assets”, which possibly only refers to BTC in the company’s cash.
This means that, in total, Tesla has a $74 million loss after all. Far less than investment bank Barclays had expected of a loss for Telsa ($460 million).
*Collaborated in writing the article Ana Bondance.