If further proof was needed that Elon Musk should not be taken at his word, Tesla’s quarterly results for July 2022 came to drive the point home a little more. While the billionaire, who swears by crypto-currencies, assured that his electric vehicle company would keep his bitcoins for the long term, Tesla finally declared that he had already gotten rid of three quarters.
« To date, at the end of the second quarter (of 2022), we have converted approximately 75% of our bitcoin purchases into fiat currency “, we read in the report. Bitcoin is also listed among the negative points of the firm’s profitability report (” bitcoin depreciation fee »).
“Tesla will not sell bitcoin”, promised Elon Musk
Tesla had purchased $1.5 billion worth of bitcoin in January 2021, when bitcoin was worth around $30,000. When the information became known to the general public a month later, the value of the crypto began to soar, marking the beginning of the upward cycle that we now know, reaching an impressive peak at 67,000. dollars at the end of 2021.
« Tesla won’t sell bitcoin », had assured the billionaire in early summer, at the low end of 2021, as controversy began to swell over the catastrophic energy cost of cryptocurrency mining. Since the firm held a good deal of it, the slightest of its decisions could alone influence the value of the crypto-asset.
Since then, Musk has been tight-lipped about the state of Tesla’s bitcoin finances. We now know that the crypto-currency he said made to last did not last long in the pockets of the firm: the manufacturer recovered 936 million dollars in Q2 2022 with the operation.
The crypto market has fallen a lot
This sale follows a drastic fall in the value of bitcoin and the crypto market in general, which began in the spring of 2022. After touching $25,000, bitcoin has been stagnating since June at $20,000 – some predict even an even steeper descent, potentially below 10,000.
Tesla therefore decided not to take the risk of falling even lower. Seeing as the firm scooped up almost $1 billion with this sale, it is holding some feathers from the initial January 2021 deal. money (a loss estimated at approximately 400 million dollars), which is far from helping its finances, while it is already losing market value in a tense economic context (war in Ukraine, shortages of components, scarcity of energy, rising interest rates).
Tesla still currently keeps the equivalent of 218 million dollars of crypto-currencies, which represents 6 times less than what the company held at the start of 2022 (1.2 billion).
During the call with analysts following the announcement of the quarterly results, Elon Msuk justified: “ It’s worth mentioning that the reason we sold off a bunch of our bitcoin holdings was because we weren’t sure when the lockdowns in China were going to be lifted. It was therefore important that we maximize our cash flow.»
And the boss to assure that his company had kept his Dogecoins and was ” certainly open to the idea of increasing [ses] future bitcoin assets » and that this sale should not be taken as « a final verdict on bitcoin “. Elon Musk’s promises only bind those who believe in them.