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Tesla converted 75% of bitcoin purchases to fiat currency in Q2 2022


Tesla, led by Elon Musk, confirmed that it bought about $1.5 billion in bitcoin in January and is expected to start accepting it as payment in the future.

Artur Widak | NurPhoto | beautiful pictures

Early last year, Tesla invested $1.5 billion in bitcoinbank on what electric car manufacturers Is called the “long-term potential” of the digital currency. The company has sold 3/4 of its holdings.

“To the end Q2we converted about 75% of our Bitcoin purchases into fiat currency,” Tesla said in its second quarter. Income statement on Wednesday. The company said those sales added $936 million in cash to its balance sheet.

It’s a quick retreat for Tesla and the CEO Elon Muskwho was a strong crypto booster in last year’s startup, often tweets about different digital currencies. The Bitcoin price has lost half of its value over the past four months during what is known as “crypto winter”.

For Tesla, the fair market value of their bitcoin holdings reached $2.48 billion in first quarter of 2021 and ended the year at about $2 billion. The company did not say at what price it sold or provide the extent of its decline, but bitcoin started the second quarter at nearly $46,000 and ended below $19,000.

Analyst Brian Johnson at Barclays estimates Earlier this week, Tesla will see $460 million worth of bitcoin-related losses as a result of the sell-off.

“The reason we’re selling a bitcoin holding is that we’re not sure when the Covid lockdowns in China will ease, so it’s important for us to maximize our cash position,” he said. Musk said in an earnings call Wednesday. “This should not be seen as some judgment on bitcoin,” he said, adding that Tesla is open to increasing its crypto holdings in the future.

However, when asked about bitcoin’s potential as an inflation hedge during the earnings call, Musk said that Tesla’s main goal is to accelerate the transition to sustainable energy, and called bitcoin “a program that can only be used as an inflation hedge.” subroutine of a subprogram”.

In the first quarter of 2021, as Tesla goes big on bitcoin, the company said the decision was a matter of becoming more flexible, diversifying, and profiting from its cash holdings. The company quickly sold 10% when the currency appreciated, donate 101 million dollars profit for the period.

Kirkhorn said at the time, the company’s aim is to “hold on to what we have long-term and continue to accumulate Bitcoin from our customers’ transactions as they purchase vehicles.”

In May of last year, Musk said Tesla would stop accepting bitcoins to buy a car because of the environmental impact of mining, but he added that the company “will not sell any bitcoins.” A week later, he tweeted emojis showing the company has a “diamond hand” when it comes to bitcoin investing, and he’s credited as “the master of our coin.”

A lot can change in a year.

– Lora Kolodny of CNBC contributed to this report.

CLOCK: CFRA’s Garrett Nelson said we’re more interested in Tesla’s quarterly results.





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