Tesla sells 75 per cent of bitcoin amid cryptocurrency crash, promises ‘record-breaking’ second-half results
- Tesla reduced its bitcoin holding to US$218 million worth last quarter, boosting its cash hoard to US$18.3 billion
- Company delivered 27 per cent more vehicles from a year earlier and promised a ‘record-breaking’ second-half results
“We have converted approximately 75 per cent of our Bitcoin purchases into fiat currency,” Tesla said in an earnings report to shareholders after the market closed on late Wednesday. The carmaker also sold about 10 per cent of its holding in April last year.
The latest conversions reduced the value of its digital assets to US$218 million on June 30 from US$1.26 billion on March 31, according to its financial statement. The bitcoin sales contributed US$936 million to its cash hoard of US$18.3 billion.
“Strongly bearish market conditions since the beginning of the year as well as the need for cash on the balance sheet likely contributed to this decision,” said Josh Olszewicz, head of research at crypto fund manager Valkyrie Investments. Tesla may have sold bitcoin at around the US$30,000 price level, he estimated. “From a treasury management perspective, downside volatility may have been too unattractive to ignore in the near term.”
The Texas-based electric-car maker began amassing the world’s biggest digital currency in early 2021 with US$1.5 billion of purchases. The conversions were to maximise its cash position because of uncertainty related to the Covid-19 lockdowns, Tesla CEO Elon Musk said on the post-earnings conference call.