Elon Musk’s Tesla has sold off most of its Bitcoin holdings worth approximately $936 million. This makes up about 75% of the company’s total Bitcoin holdings as revealed by its Q2 earnings report.
During the company’s shareholder presentation, the electric car maker revealed that “Bitcoin Impairment” had a negative impact on profitability during the second quarter, no doubt referring to the recent crypto crash. However, the company also reported $2.5 billion in operating profit during the same profit.
Unsurprisingly, the Bitcoin market immediately reacted to the news. Bitcoin was worth $24000 on Wednesday but dropped sharply to $23,078 soon after the markets closed.
Ethereum, which is the second largest cryptocurrency by market capitalization, went down by 3% shortly after the financial report from Tesla went public.
Tesla and Elon Musk have had an on-and-off relationship with Bitcoin. Back in February 2021, Tesla invested $1.5 billion in Bitcoin after changing the policy that allowed it to hold digital assets. Thanks to this move, Bitcoin saw a new all-time high of $43,000.
But in May 2021, Musk announced that Tesla would stop accepting Bitcoin as payment over concerns about the environmental impact of Bitcoin mining.
Fast forward to Q1 2022, Tesla wrote:
We believe in Bitcoin’s long-term potential of digital assets both as an investment and also as a liquid alternative to cash.
But then it also warned shareholders about its potential negative impact on profitability due to price changes, which we are now seeing in the company’s latest financial report.
