coinculture.com
“We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as some verdict on bitcoin,” Elon Musk said on Wednesday’s results call. “It’s just that we were concerned about overall liquidity for the company, given Covid shutdowns in China.”
" alt="" />Elon Musk and Bitcoin. Image: CoinCulture
None of Tesla’s dogecoin has been sold
According to Chief Financial Officer Zachary Kirkhorn, Tesla changed most of its bitcoin assets to fiat currency for a realised gain. At the same time, impairment charges on the remaining holdings resulted in a net loss of $106 million.
Tesla claimed to purchase $1.5 billion worth of bitcoin in February 2021, when the firm said it would begin taking bitcoin as payment. The price of Bitcoin increased to around $44,000 following this statement.
At 8:15 a.m. ET on Thursday, the price of Bitcoin was about $22,630, a 67% decrease from its all-time high of almost $70,000 in November.
As of June 30th, Tesla’s digital assets were valued at $218 million, down from $1.26 billion at the end of March.
Laura Hoy, an equities analyst at Hargreaves Lansdown, said that although it is unknown how much Tesla lost due to the cryptocurrency sell-off, most of the harm has been identified.
However, the bitcoin losses highlight a crucial aspect of the Tesla investment case: the eccentricity of its owner. While Musk’s innovative prowess has benefited the corporation, his personality is beginning to generate governance concerns.
When questioned about the company’s long-term outlook on bitcoin, Musk described cryptocurrencies as “a sideshow to the carnival” and said they’ve neither here nor there on cryptocurrencies.
Cryptocurrency is not something we often consider, Musk said. We often consider expanding output and speeding the arrival of renewable energy.
A Tesla representative did not respond quickly to a request for comment.