Tesla electric car maker sold 75% of its Bitcoin shares worth about $936 million in the second quarter of 2022, the company’s earnings report released Wednesday revealed.
“As of the end of the second quarter, we have converted approximately 75% of our Bitcoin purchases to fiat currency. Second quarter conversions added $936 million of cash to our balance sheet,” the company said in its earnings release. Tesla disclosed this amount under “digital asset sales revenue” in its second quarter results.
The company said in a shareholder presentation that its year-over-year operating income was primarily impacted by several items, including “Bitcoin depreciation,” which negatively impacted profitability in the second quarter, as it posted $2.5 billion in operating income.
The electric car maker closed the second quarter with Bitcoin holdings worth $218 million in “digital assets,” compared to $1.261 billion in digital assets at the end of the previous quarter.
“The reason we sold some of our bitcoin holdings was because we weren’t sure when the Covid lockdowns in China would ease, so it was important for us to maximize our cash position. This should not be taken as a verdict on bitcoin,” Tesla founder Elon Musk said in the earnings call on Wednesday.
He also added that “Tesla is open to increasing its crypto holdings in the future, so this should not be taken as a judgment on bitcoin. It’s just that we were concerned about the company’s overall liquidity, given the COVID shutdowns in China.” Musk added that Tesla still owns Dogecoin, a popular meme-based cryptocurrency.
After the release of the second quarter earnings report, Bitcoin’s price immediately fell about 1.7% to $23,300, but recovered to previous levels after Musk made his comments on the earnings call.
For the inexperienced, Tesla made headlines in February 2021 when it announced its $1.5 billion investment in Bitcoin, sending the cryptocurrency’s price skyrocketing to a new all-time high of $43,000. In March 2021, the company began accepting Bitcoin as payment for its Tesla vehicles.
Furthermore, in April 2021, Tesla sold 10% of Bitcoin holdings for $272 million in cash during the first quarter to show users that the crypto is a sound investment.
However, in May 2021, Musk announced that Tesla would stop accepting Bitcoin as payment, citing concerns about the increasing use of fossil fuels for Bitcoin mining and transactions. But the company has said it could resume the adoption of Bitcoin as a means of payment if miners switched to more sustainable energy sources to mine the currency.
At the time of writing, Bitcoin’s price has opened at $22,961.20 after closing yesterday at $23,231.73.