Bitcoin

Elon Musk’s Tesla has sold 75% of its Bitcoin: Here’s why | ZDNET

Tesla has revealed that it dumped approximately 75% of its bitcoin between April 1 and the end of June.

The sales, which took place during the second calendar quarter, added $936 million in cash to its balance sheet and were reported as a negative impairment, Tesla said in its second-quarter earnings report.

Reading: Tesla has sold its bitcoin

Over the past year, bitcoin prices peaked at around $67,000 in November 2021, and as of late June 2022, were trading at just under $20,000.

see: elon musk: tesla should produce more than 1.5 million cars in 2022

tesla in February 2021 reported that it had purchased $1.5 billion worth of bitcoin to diversify its balance sheet away from cash and maximize returns.

Then in May, Tesla boss Elon Musk decided that Tesla would stop accepting bitcoin for Tesla purchases just two months after it began accepting it. Bitcoin’s price fell more than 4% after Musk tweeted his decision.

See also: Will 2017 be Profitable for Bitcoin Mining?

Tesla’s balance sheet indicates that it had $218 million in “digital assets, net” as of June 30, compared to approximately $1.2 billion in the last three quarters and $1.3 billion in the quarter ended June 30, 2021.

Presumably most of tesla’s remaining digital assets are bitcoin, but musk said on an earnings call that tesla had not sold its dogecoin. As Techcrunch noted, Musk has said that he personally owned Dogecoin, but Tesla has so far not stated this.

“we converted the majority of our bitcoin holdings to fiat for a realized gain, offset by impairment charges on the remainder of our holdings, resulting in a net cost of $106 million for gains and losses included in the restructuring,” a Tesla representative said on an investor call.

musk jumped in to explain that tesla’s decision to convert its bitcoin holdings was not a “verdict” on bitcoin, but rather was taken to improve its cash position due to uncertainty over covid-19 restrictions in china , which affected its shanghai gigafactory.

“the reason we sold a lot of our bitcoin holdings was the uncertainty of when the covid lockdowns in china would ease, so it was important for us to maximize our cash position given the uncertainty of the lockdowns covid in china”. said musk.

“we are certainly open to increasing our coin holdings in the future so this should not be taken as a verdict on bitcoin. it’s just that we were worried about overall liquidity due to covid shutdowns in china. and not we have sold any of our dogecoin.”

See also: Here&x27s Why I Still Won&x27t Buy Bitcoin, and You Shouldn&x27t, Either | The Motley Fool

Tesla reported that total production for Models S and X and Models 3 and Y reached 258,580 in the second quarter, up 25% from a year earlier. total deliveries reached 254,695, up 27% year-over-year. however, production in the second quarter was also down 17% from the previous quarter and delivered 55,000 fewer vehicles compared to the previous quarter.

tesla said it continued to experience manufacturing challenges due to covid shutdowns, global supply disruptions, labor shortages, and “logistics and other complications, which limited our ability to consistently operate our factories at full capacity.” “.

see: elon musk’s advice for entrepreneurs: “get into the lithium business”

musk also addressed questions about whether the company would cut prices after raising them across its entire line in June by 10% due to inflation, elektrek reported at the time.

In short, maybe, but it depends on inflation and that’s out of their control, Musk said. Due to the six-month to one-year wait between order and delivery, Musk said Tesla needs to “anticipate what the likely inflation rate will be during that time period.”

“if we see signs that the rate of inflation is slowing, or if we see, then we wouldn’t need to increase our car prices. there may be a slight decrease in car prices, but this fundamentally depends on the macroeconomic inflation”.

musk sees inflation abating by the end of 2022, but said his prediction should be taken with a grain of salt.

See also: Man Claiming to Have Invented Bitcoin Wins Dispute, Gets to Keep 50B in Crypto

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