The international manufacturer of electrical vehicles, Tesla, liquidated 75% of its Bitcoin holdings, bringing in $936 million.
So far, the revelation that Elon Musk’s Tesla Motors (NASDAQ: TSLA) has sold almost 75% of its holdings of the world’s top crypto, Bitcoin, has did not affect the price of BTC.
The price of crypto has increased by 1% in the last 24 hours, reaching $23,273 (AU$33,849).
Why Tesla Dumped Most of Its Bitcoin Holdings
The second quarter report was released yesterday by the worldwide electric vehicle manufacturer (overnight Aussie time).
It was in that report that Tesla detailed the many setbacks to its year-over-year operating income. The corporation cited “Bitcoin impairment” as an example.
Even while the corporation appears to have incurred losses on its crypto effort thus far, the transaction resulted in a positive cash inflow of $936 million.
We have converted over 75% of our Bitcoin purchases into fiat currency as of the end of Q2. Tesla announced that Q2 conversions brought in $936M in cash to the company’s cash and short-term investments.
In early February of 2021, Tesla put $1.5 billion of its own money into the cryptocurrency. Following reports of Elon Musk’s support for Bitcoin, the token’s value skyrocketed, reaching new highs at a time of slightly over US$44,000.
Tesla reported $272 million in revenues from the sale of around 10 percent of its holdings in Bitcoin in its April 2021 quarterly update, as the price of Bitcoin had skyrocketed in the early months of 2021.
Is Elon Musk’s Crypto-love Finally Over?
In all likelihood, Elon Musk will not abandon cryptocurrencies.
This sale of Tesla is not “some verdict on Bitcoin,” the richest man in the world said.
However, in light of the global pandemic’s continuing effects, the electric vehicle manufacturer was aiming to increase its cash reserves.
According to research head Josh Olszewicz, Valkyrie Investments, Tesla probably liquidated its Bitcoin holdings for around US$30,000. At the present pricing, the company’s crypto holdings are worth about $218 million.
Olszewicz, as cited by Bloomberg, claims that market conditions that have been extremely pessimistic since the beginning of the year, in addition to the requirement for cash on the balance sheet, undoubtedly played a role in this choice. In the short run, negative volatility may have been too unappealing for treasury managers to ignore.
“The views and opinions on this Crypto News Website are solely those of the authors and contributors. These views and opinions do not necessarily represent those of iBaseTrading or its partners.”
