Wednesday, August 10, 2022

Tesla sold 75% of its Bitcoin, Musk says Dogecoin still with him

Tesla has sold 75 per cent of its Bitcoins, adding $936 million in cash to its balance sheet in the second quarter (Q2) this year, as it deals with economic meltdown amid cryptocurrencies falling off the cliff.

Last year, Tesla made a $1.5 billion investment in Bitcoin and announced that it would accept Bitcoin as payment.

In the second-quarter (Q2) earnings call with analysts, Tesla Ceo Elon Musk said that the reason the company sold a bunch of its Bitcoin holdings “was that we were uncertain as to when the COVID lockdowns in China would alleviate”.

“So it was important for us to maximise our cash position, given the uncertainty of the COVID lockdowns in China. We are certainly open to increasing our Bitcoin holdings in future. So this should not be taken as some verdict on Bitcoin,” he noted.

Musk said that the company was concerned about overall liquidity for the company given shutdowns in China.

“And we have not sold any of our Dogecoin,” he added.

Zachary Kirkhorn, Chief Financial Officer at Tesla, said the company converted a majority of Bitcoin holdings to Fiat for a realised gain, “offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the P&L included within restructuring and other”.

After less than two months of going bullish on Bitcoin, Tesla applied brakes on the popular cryptocurrency as a payment mode to buy its electric vehicles, citing environmental harm.

Musk then said that the electric car maker will not sell any Bitcoin and intends to use them for transactions as soon as mining moves to more sustainable energy.

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