Elon Musk is a code within cryptography. This is due in large part to his association with– For a few months last year, Musk was known as “Dogefather” – but that’s also because Tesla is one of the most prominent institutional investors in Bitcoin. Or at least it was.
In Tesla’s latest earnings report, released on Wednesday, the company revealed that it has sold the majority of its bitcoin: “We converted nearly 75% of our Bitcoin purchases into fiat currency. In the second quarter, transfers added $936 million in cash to our balance sheet. public.”
in Subsequent earnings callMusk explained that the sale was related to the ongoing COVID shutdown in China, the world’s largest auto market and also where many Tesla cars are made.
“The reason we sold off a bunch of our bitcoin holdings was because we weren’t sure when the Covid lockdowns would ease in China, so it was important for us to maximize our cash position given the uncertainty,” Musk said. “We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as a judgment on bitcoin.”
“We haven’t sold any of our Dogecoins, and we still have our Dogecoins,” Musk added.
Tesla has $621 million in cash, according to an earnings report on Wednesday, which means cash flow would have been negative had it not been for the $936 million bitcoin sale.
Buy Bitcoin worth $1.5 billion from Tesla,It contributed to the cryptocurrency market euphoria that caused the price of Bitcoin to soar from around $20,000 in December 2020 to $60,000 in March 2021. Tesla originally bought bitcoin “to provide us with more flexibility to further diversify and maximize returns on our money,” the company said in its 2021 SEC filing.
Largely driven by tweets of encouragement from Musk, dogecoinLast May, the market size briefly reached $70 billion. It is unknown how much Dogecoin Tesla owns, although the company’s earnings report states that it owns $218 million in digital assets. Much of that is likely to be Tesla’s remaining bitcoin.
Cryptocurrency prices have since fallen sharply from their 2021 highs. Bitcoin is down 48% since the beginning of the year, while ether is the second largest cryptocurrency,. Dogecoin is currently priced at just over 7 cents.
Although Musk advocates for the bitcoin and cryptocurrency communities, he has also made statements that promote and criticize them. “Bitcoin is almost like fiat currency,” he said in February. “The key word is ‘almost.’” However, when fiat currency has a real negative interest, only a fool would not look anywhere else.
After announcing that Tesla would accept bitcoin as payment for its electric cars, Musk reneged and said he would pause those payments due to environmental concerns, given the amount of fossil-fueled energy it would take to produce it. “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at a significant cost to the environment,” Tweeted.
Tesla did not respond to a request for additional comment.
revision: This story initially miscalculated how much cash Tesla got from selling it cryptocurrency. The company earned $936 million in cash through the deal.
#Tesla #sold #bitcoin #Dogecoin