Product Architect of Tesla, Elon Musk, has sold almost all of its Bitcoin into fiat currency last week. The news was released last Tuesday by Tesla’s Q2 2022 in a report that read they had converted approximately 75% of our Bitcoin purchases into fiat currency. And now the company has announced $64M profit from the sale.
Following the selloff the company gained an additional $936 million in cash for its balance sheet, and Bitcoin price decreased by 1.7%.
Plunging bitcoin prices forced Tesla to record a $170 million impairment loss alongside solid second-quarter earnings, which saw a 42% jump in revenue.
Although this profitability is down compared to the first quarter, it was up way more than the levels of last year. However, the profitability of the company was affected by rising inflation and growing competition for battery cells.
The company said it may increase or decrease its holdings over time but it didn’t reveal any details about Tesla’s strategy: “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 on our view of market and environmental conditions.”
Musk claimed that Tesla is open to buying bitcoin in the future. “It’s just that we were concerned about overall liquidity for the company, given Covid shutdowns in China,” adding that his company did not sell any of its dogecoin.
The company announced that it no longer accepts Bitcoin for car payments last May due to environmental conditions regarding Bitcoin mining. The CEO declared that Tesla may resume accepting Bitcoin again under the circumstance that the mining industry grants moving toward renewable energy but Musk said the reason behind the recent selloff is for the company to maximize its cash position.