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Is Tesla’s Bitcoin Liquidation Impacting The Crypto Market?

Written by: Elena R

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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Jul 26, 2022

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Tesla just released its Q2 earnings report. According to the report, the company sold $75% of its Bitcoin (BTC) assets, for a total of around $936 million.

Additionally, due to changes in the carrying value of its cryptocurrency assets, Tesla recorded $170M in impairment losses for the six months that ended on June 30, 2022. For the same, the company saw gains of $64 million. However, for the six months that concluded on June 30, 2021, Tesla realized gains on the conversion of their digital assets of $128 million.

The company transferred 75% of its holdings into fiat, according to the statement. It does not, however, specify which crypto it is referring to. As Tesla was the second-largest currency holder, it is likely that the majority of digital assets were Bitcoin. elon musk , the company’s CEO, did, however, affirm on Twitter that he had not sold any of the Dogecoin (DOGE) holdings.

According to Coindesk, tesla  Chief Financial Officer Zach Kirkhorn said, “converted a majority of our bitcoin holdings to fiat for a realized gain, offset by impairment charges on the remainder of our holdings, netting a $106 million cost to the [Profit and Loss Statement] included within restructuring and other.”

For How Much did Tesla it Bitcoins?

According to the SEC filing, Tesla sold its Bitcoin or other cryptocurrency holdings before June 30. On the other hand, it is unclear exactly when Tesla sold their cryptocurrency.

Tesla bought its first bitcoins in the first quarter of 2021 for $1.5 billion but hid the average price paid. Later in the first quarter, the corporation sold a 10% portion of its holdings in bitcoin, increasing its earnings by $272 million. Until the most recent quarter, it hadn’t increased or decreased its stakes. 

Although the company withheld the selling price for its bitcoin in the second quarter, a quick calculation reveals that the average price would be roughly $29,000 per bitcoin, saving Tesla from having to take a significantly larger impairment charge. About $18,700 was the price of bitcoin at the end of the second quarter.

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Elena R

Elena is an expert in technical analysis and risk management in cryptocurrency market. She has 10+year experience in writing - accordingly she is avid journalists with a passion towards researching new insights coming into crypto erena.

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