Tesla Moved Off 75% of its BTC Holdings in Q2
- Tesla had previously announced plans to receive payment in bitcoin.
The recent happenings in the crypto space and the bear market have greatly affected the world’s leading cryptocurrency, Bitcoin, resulting in a huge loss of value. Bitcoin has struggled to get back to its former height since it began a chain of decline. As a result, Tesla, an automobile company that produces electric cars, reportedly sold off 75% of its Bitcoin assets in the second quarter (Q2). This was reported in the recent financial disclosure shared on Wednesday, July 20th, 2022.
Although Tesla’s CEO, Elon Musk is a well-known friend of the crypto world, the car company appears to be cutting its loss. Tesla’s official announcement stated that it had converted 75% of its total BTC assets in the second financial quarter into fiat currency. It went further to disclose that a total of $936M gain had been added to their financial sheet.
It should, however, be recalled that in March 2021, Tesla had sold off some of its BTC assets which resulted in a financial gain of $128M on Net value. This move proved Musk’s preference for having cash value over BTC assets probably due to a lack of faith in BTC’s stability in the financial market.
Tesla, early this year, was open to receiving payments via BTCs after it had acquired $1.5B worth of BTC assets to become one of BTC’s highest value holders. The sudden change in Tesla’s choice and decision is predicted to be due to the reduced value of Bitcoin. This decision seems to have been influenced strictly by business purposes as opposed to some analysts suspecting it was done to cause more harm to Bitcoin.
Tesla in its second quarter report also noted a reduction in its automobile gross margin sales which might be a result of the growing competition for the Elon Muk-led firm. For several years, Tesla ran the electric car market on its own. But, other companies offering similar products have since emerged.
However, it remains to be seen if Elon Musk who is known to be a lover of Cryptocurrency will divert the earnings from his 75% sell-off of Tesla’s BTC asset, and invest it in Dogecoin, his favorite crypto. Certainly, the world remains surprised with the news and will definitely anticipate Musk’s next move in the forthcoming days.