“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency," Tesla said in a shareholder letter Wednesday as part of the company’s earnings report. “Conversions in Q2 added $936M of cash to our balance sheet."
The electric-car manufacturer disclosed in February 2021 that it had invested $1.5 billion in Bitcoin, and subsequently sold 10% of its stake that April. Tesla said Wednesday its digital assets have shrunk to $218 million, and that a Bitcoin impairment hurt second-quarter profitability.
Tesla Chief Executive Elon Musk cited concerns about his company's overall liquidity as the reason for the sale. He added that the company sold the Bitcoin to maximize its cash position because of uncertainty related to the Covid shutdowns and that the sale should not be seen as some verdict on Bitcoin. Musk added that Tesla did not sell any of its dogecoin, a meme-based cryptocurrency that he has touted.
Tesla sold $936 million worth of bitcoin in the second quarter, more than a year after the company bought $1.5 billion of the cryptocurrency at the peak of its massive growth and popularity.
Musk has been an outspoken supporter of cryptocurrencies. His statements on the future of crypto and disclosures about his ownership of digital assets often boost the price of dogecoin and bitcoin.
Tesla accepted bitcoin as payment for less than two months before stopping in May 2021. Musk had said that the company could resume accepting bitcoin once it conducts due diligence on the amount of renewable energy it takes to mine the cryptocurrency.
Bitcoin rebounded after a brief sell-off late on Wednesday sparked by news that electric carmaker had sold its holdings of the virtual token. Bitcoin has been in recovery mode so far this week, in line with the stock market, as investors appear more optimistic about the U.S. Federal Reserve's ability to rein in decades-high inflation.
