Moon or Doom? Tesla sells 75% of its Bitcoin holdings
Despite the massive news, Bitcoin only dropped 5% before recovering.
Electric vehicle manufacturer Tesla today released its quarterly earnings report. The report states that Tesla converted 75% of its Bitcoin holdings to fiat currency, adding US$963 million cash to its balance sheet over the last 3 months.
The company stated that its profitability was impacted by factors including high raw material and logistics costs, negative FX impact and Bitcoin impairment. The release of the report saw the price of BTC drop around 5% in as many hours. Bitcoin's price has since stabilised and is currently trading at AU$33,000 (US$22,800).
Tesla CEO, Elon Musk is a polarising figure in the crypto space. His Tweets throughout 2020-2021 were largely responsible for the exponential growth of the meme coin, Dogecoin, which saw over 20,000% returns during this time. Musk also announced in March 2021 that Tesla would be accepting payments for vehicles in the form of Bitcoin. However, this decision was later overturned due to concerns surrounding the environmental impact of PoW mining.
Musk is an advocate for digital currencies and with over 100m Twitter followers, his previous Tweets have proven to move markets. He is yet to comment regarding the Tesla earnings report, although last month stated that he will 'keep supporting Dogecoin'.
The tech billionaire is also in the media surrounding his purchase of Twitter for US$44 billion. Musk had big plans for the social media platform, claiming he would turn it into a free speech arena, scrap ads and launch a war on the bot army. He has since been sued by the company and has been accused of attempting to sabotage the deal. The trial is set to take place in October.
The TSLA share price is down approximately 35% since April 2022, currently trading at US$724.50. The company has been forced to shut down its Shanghai factory due to lockdown restrictions and has reportedly laid off 229 workers in an attempt to further cut costs, after a significant drop in vehicle sales. It's still uncertain whether Tesla has plans to sell more of its crypto holdings and what impact this might have on the market.
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Billy Endres owns cryptocurrencies as of the publishing date.