Tesla sold almost 75% of its Bitcoin assets due to the depreciation of the cryptocurrency
Tesla got rid of nearly 75% of the $936 million worth of Bitcoin that the company owned. The sale became known from the report of the manufacturer of electric cars for the second quarter.
In the presentation to shareholders, the company explained that “the depreciation of Bitcoin” had a negative impact on profitability in the second quarter. During this period, Tesla reported $2.5 billion in operating income.
The market immediately reacted to the news, further devaluing Bitcoin and other cryptocurrencies. Bitcoin, which traded at $24,000 on Wednesday, fell to $23,078.18 in an hour, losing 2.5% of its value. Ethereum, which has the second largest market capitalization, lost 3% in the hour following the publication of the Tesla report.
Elon Musk and Tesla have a complicated relationship with cryptocurrencies. In February 2021, the company invested in Bitcoin $1.5 billion. Then it had a positive effect on the cryptocurrency. It reached an all-time high of $43,000.
Already in May 2021, Musk changed his attitude towards Bitcoin. He announced that Tesla would stop accepting it as payment, citing the environmental damage of mining.
In its Q1 2022 report, Tesla said it believes in the “long-term potential of Bitcoin digital assets.” However, even then shareholders were warned that price changes affect its profitability.