“I would not be surprised if Tesla keeps nibbling in Bitcoin when Bitcoin stabilizes, otherwise they would have sold 100 percent,” Markus Thielen, Chief Investment Officer at IDEG, told Cointelegraph. The times-revenue method is a valuation method used to determine the maximum value of a company. Automotive gross margins at Tesla came in at 27.9%, down from 32.9% last quarter and 28.4% a year ago. The company said margins were hurt by inflation and more competition for battery cells and other components. He offered to buy the social media platform for $44 billion but officially terminated the deal on July 8. Twitter subsequently filed a lawsuit against Musk to force him to go through with the deal.
Although China had eased COVID restrictions in major cities at the end of May, a jump in cases in Beijing and other key regions prompted the government to re-impose rules a few weeks later. Earlier this month, mass testing and lockdowns were implemented in Shanghai. Bitcoin lost half-a-percent overnight after Tesla said it had sold about 75% of its holdings of the virtual token. Among them is Fundstrat Global Advisors, which this week noted that markets have historically found a bottom half a year before the Fed stops tightening via key interest rate hikes. Tesla aggressively embraced Bitcoin in 2021, investing $1.5 billion in the currency as CEO Elon Musk touted Bitcoin’s advantages over standard fiat currency.
During normal production, Tesla usually sells roughly 60,000 vehicles in China per month. Despite selling a record number of cars in June, roughly 70,000 fewer cars were sold in the second quarter compared to the first quarter. “We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict on bitcoin,” Musk said during the call with analysts.
Elon Musk is jumping ship.
Tesla made $936 million in cash revenue from the sale, helping the company limp over the quarterly finish line, though barely meeting Q2 expectations. Investors expected revenue of $16.88 billion this quarter, with Tesla reporting $16.9 billion. Indeed, Musk proclaimed last month that a recession was “inevitable” at some point, and probable in the near term. The capricious executive also announced a roughly 10% reduction to Tesla’s workforce over three months or so, as the company has hired too aggressively in some areas. Twitter is suing Musk to enforce the binding merger agreement he signed, and the two parties are poised to face off in court within months.
- Tesla said Wednesday its digital assets have shrunk to $218 million, and that a Bitcoin impairment hurt second-quarter profitability.
- Tesla had plans to accept BTC payments at the time, but those plans were later scrapped due to concerns about Bitcoin’s energy consumption.
- Now that Tesla, Twitter, and bitcoin have slumped in price, and there’s a recession looming, Musk may be retrenching and attempting to reverse some of his wilder moves as a gloomier reality sets in.
- Interestingly, this implies that Tesla sold its Bitcoin for $28,888, just beneath their average acquisition price.
- However, Musk said Tesla would be open to increasing its crypto holdings in the future.
Every investment and trading move involves risk, you should conduct your own research when making a decision. The second half of 2022, the firm thus predicted, could take the S&P 500 to 4,800 points — a boon for crypto markets still heavily correlated with moves in equities in general. The irony of Musk’s comments was not lost on crypto commentators, and other voices are already betting on a rebound in stocks being here to stay.
Elon Musk Discusses Merits Of Bitcoin, Reveals SpaceX Holds BTC
Daniel Van Boom is an award-winning Senior Writer based in Sydney, Australia. When not writing, Daniel Van Boom practices Brazilian Jiu-Jitsu, reads as much as he can, and speaks https://bitcoinvaultexplorer.com/tesla-sold-bitcoin-the-reason-why/ about himself in the third person. Tesla also mentioned that its crypto holding now has dropped to $218 million, Bitcoin impairment hurt second-quarter profitability.
“As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency,” the update stated. Shortly after, the automakerstarted accepting the cryptocurrency as paymenton new vehicles. The global crypto market capitalisation went down by 2.7 per cent to $1.1 trillion as of 8.50 am. The global crypto volume was down by 6.99 per cent at $94.4 billion, according to Coinmarketcap data. On July 2, the company reported its first-ever decline in quarterly vehicle sales, which the company attributed to the disruption in Shanghai.
Tesla ‘s Paper Hands, What Do They Say About Bitcoin?
In the letter to investors, Tesla execs reveal the company has sold 75 percent of its Bitcoin holdings, adding $936 million in cash to its balance sheet. “The reason we sold a bunch of our bitcoin holdings is we were uncertain as to when the covid lockdowns in China would alleviate, so it was important for us to maximize our cash position given the uncertainty,” Musk said. “We are certainly open to increasing our bitcoin holdings in future, so this should not be taken as some verdict of bitcoin.” Last week, Tesla raised eyebrows again by selling approximately 75 percent of its Bitcoin holdings, converting them into $936 million worth of good old-fashioned fiat currency. The move called out concerns over uncertainty surrounding the Covid-19 shutdowns in China. Tesla Chief Executive Elon Musk cited concerns about his company’s overall liquidity as the reason for the sale.
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