After selling 75% of its BTC holdings in the second quarter of 2022, Elon Musk’s company Tesla did not buy or sell any BTC in the third quarter.
Tesla’s 2022 Q3 Earnings Report
As per its latest earnings reports, the electric car company made no changes to its Bitcoin holdings in the third quarter of 2022. The company did not sell any more of its BTC holdings after doing so in the second quarter, and neither did it purchase new BTC. The value of these digital holdings at the end of the second quarter was $218 million, and it continued to remain so, as per the report, even after the third quarter. Since the price of BTC has continued to hover around the $20,000 mark after both quarters, the total value of the company’s holdings has not changed either.
Q2 BTC Sell-Off
The company used to hold a much more significant amount of Bitcoin; however, it got rid of most of it through a significant sell-off in the second quarter. In fact, the company sold a whopping $936 million worth of Bitcoin in the previous quarter, thus getting rid of roughly 75% of its total Bitcoin holdings. Before the sell-off, the company held a BTC reserve worth $1.26 billion. The company also claimed that the sale brought in $64 million of profits, offset by impairment charges of $170 million and a net cost of $106 million on its profit and loss statement. The purpose behind the sell-off was to raise cash.
BTC Sold To Mitigate Uncertainties
After the last sell-off, CEO Elon Musk claimed that the uncertainty in China due to COVID lockdowns had affected the company’s business and was a key reason behind the sale.
He said,
“It was important for us to maximize our cash position, given the uncertainty of COVID lockdowns in China.”
He also stated that Tesla could potentially increase its Bitcoin holdings in the future. However, the decision to expand the reserves was not made in the latest quarter, as revealed by the Q3 earnings report. Furthermore, he had also requested the public not to read too deeply into the sell-off as a verdict on the potential of Bitcoin.
Despite the sale in the second quarter and not adding any new BTCs in the third quarter, Tesla remains one of the largest holders of the premier crypto by a publicly traded company. In the number one position is MicroStrategy, which holds 130,000 BTC (approx. $2.68 billion), while Galaxy Digital Holdings comes in second with its reserves of 16,400 BTC (approx $313 million).
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Sourced from cryptodaily.co.uk.
Written by Amara Khatri on 2022-10-20 13:16:00.
