Yesterday, it was revealed that Tesla has sold almost all of its Bitcoins purchased in December 2020 for a total of $1.5 billion. The company then officially announced that digital currencies have “long-term potential.”
“At the end of the second quarter, we had converted approximately 75% of our Bitcoin purchases into fiat currency,” Tesla said in its second-quarter earnings report.
Tesla raised $936 million by converting 75% of its Bitcoin purchases. The average selling price is $29,000 per bitcoin.
“The reason we sold some of our bitcoin holdings was because we weren’t sure when the quarantine on Covid in China would ease, so it was important for us to maximize our cash position.”
“This should not be taken as any kind of judgment on Bitcoin,” Elon Musk said, adding that Tesla is open to increasing its crypto assets in the future.
Tesla had $2.48 billion invested in Bitcoin at the end of its Q1 2021 report, down from $2 billion at the end of the year. Selling Bitcoins at $29,000 generated essentially no revenue for Ilon Musk’s company, as the average purchase price in December 2020 was about the same level.
Analyst Brian Johnson of Barclays wrote a few days ago that “given this week’s drop, Tesla will face a $460 million bitcoin devaluation given the sale.”
Tesla delivered 254,69 thousand cars, up from 310,000 a quarter earlier (+27% year-on-year). The company explained that global supply chain disruptions and labour shortages, among other problems, prevented the plants from running at full capacity. The company’s shares are up 1.45% to $753.3 apiece after the close of trading.
Incidentally, Elon Musk wrote that he hasn’t sold Dogecoin and he reportedly wants to make the coin an official cryptocurrency on Twitter.
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