According to the second quarter results report, the Tesla company would have liquidated for 75% of its BTC. For an amount close to 936 million dollars. A decision that the company justified due to the strong depreciation of the digital asset.
Tesla Resells Bitcoin, Market Reacts!
As we know, in the small world of digital assets, Elon Musk’s word is gospel. An element that could also be applied to his decisions or the decisions of the companies he controls. Announcing the results for Q2 2022, the brand highlighted the fact that the bitcoin depreciation There was a strong negative impact on its profitability. In the second quarter, however, the company posted an operating profit of close to 2.5 billion dollars!
Either way, the announcement that Tesla was selling BTC had an impact on the crypto market. If the price of Bitcoin exceeded $24,000 yesterday, it fell back to the threshold of $23,000 after the announcement. At the time of writing, one BTC is trading just below the $23,000 threshold, according to data from the Coinmarketcap platform.
But the observation of decline goes beyond Bitcoin. Thus, major altcoins like Ethereum had the same bearish momentum.
Musk and Bitcoin: I love you, and not me
The relationship between Elon Musk, his companies and Bitcoin is particularly turbulent. In February 2021, the Tesla company was investing $1.5 billion in Bitcoin, after changing its investment policy to allow it to own digital assets. At the time, this news was considered extremely positive by the crypto market. Bitcoin then reached a new all-time high, near $43,000.
But a few months after this announcement, the electric vehicle brand was doing something about it. Arguing that the Bitcoin blockchain was too energy-intensive and that the environmental impact of mining ultimately did not match the brand image of the American company, which was associated with the ecological transition. In a tweet published last May, Elon Musk justified the decision:
This tweet marked the change in company policy. A few days later, Tesla and SpaceX announced that they would accept Dogecoin as payment. If the announced effect was much greater than the concrete measures implemented, this had a significant impact on the course of the DOGE.
Tesla and Musk are still confident about the potential of digital assets!
In the report for the first quarter of the year, the Tesla company said the following:
We believe in the long-term potential of bitcoin as a digital asset, as an investment and also as a liquid alternative to cash.
But this report also warned shareholders about the risk of digital asset volatility. Volatility is likely to affect group profitability. These warnings were called today in response to the group’s announcement yesterday.
In this second quarter, the resale of a large part of their Bitcoin is not to be considered as a loss of confidence in the crypto ecosystem. However, remember that the company is listed on the stock exchange and must be accountable to shareholders. There is no indication that Tesla will not buy new Bitcoin in the coming weeks or months.
Also read: How Tesla wanted to make Bitcoin greener!