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Tesla Keeps Its Bitcoin Holdings Amid Crypto Market Turmoil

source-logo  coinculture.com 27 January 2023 10:00, UTC

Rather than selling off 75% of its Bitcoin BTC holdings in the second quarter of 2022, electric car company Tesla decided to hold onto all its bitcoin leading into 2023

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For the second consecutive quarter, Tesla did neither buy or sell any of its Bitcoin, as seen in the company’s financials released on January 25 in conjunction with the release of its Q4 results. This occurred though the FTX collapse caused significant market upheaval in November and December.

Due to $34 million in impairment charges as the price of Bitcoin dropped between the end of September and the end of December, the company’s digital asset holdings decreased from $218 million to $184 million as of December 31.

The price of bitcoin peaked at about $19,500 on September 30 and dropped to roughly $16,600 on December 31.

Elon Musk’s Tesla held onto its Bitcoin in Q4. Image: Nikkei montage/AP

While the E.V. maker sold 75% of its Bitcoin in the second quarter, it hung onto the remaining 25% until the third quarter. Profit for the quarter came in at $64 million on sales of $936 million.

To show the liquidity of Bitcoin as an alternative to storing cash on a balance sheet, as Tesla CEO Elon Musk put it at the time, was the motivation for the transaction.

On its most recent earnings call on January 25, Tesla did not comment on its Bitcoin holdings or its outlook on Bitcoin. It is believed that Tesla holds 9,720 BTC.

Overall, Tesla made $5.7 billion in earnings during the fourth quarter on $24.3 billion in revenues, marking the lowest level of gross margins in five quarters. In 2022, the firm earned $20.8 million after gaining $81.4 billion in revenue.

In 2022, we produced & delivered 1.3M+ vehicles 💪

In Q4 we achieved our highest-ever quarterly revenue, operating income & net income → https://t.co/6WkUryAhKO pic.twitter.com/aOzmL76uja

— Tesla (@Tesla) January 25, 2023

Even though sales were lower than expected, profits exceeded projections.

At the end of the trading day, Tesla’s stock price had risen by almost 0.40%. According to Google Finance, it has grown in value after the market close, gaining about 4.6% since the start of the trading day.

coinculture.com