According to Tesla’s Q2 earnings report, 75% of its bitcoin was sold, which is approximately $936 Million.
Elon Musk founded the electric car company and stated in a shareholder presentation, that Bitcoin impairment had adversely affected its profitability in the second quarter. It posted $2.5 billion in operating profit.
The news was immediately received by the crypto market.
Bitcoin(BTC) soared to above $24,000 Wednesday. However, it dropped sharply after markets closed at 4:05 p.m. Eastern Time. According to CoinMarketCap, it was trading at $23,078.18 as of the time of writing. This is a drop of 2.5% over the past hour.
Ethereum (ETH), which is the second-largest cryptocurrency in terms of market capitalization, fell 3% during the hour after the Tesla earnings report.
Tesla and Musk have had a long-standing relationship with Bitcoin.
After changing its January investment policy to allow digital assets to be held, the electric vehicle company invested $1.5 million in Bitcoin in Feb 2021. This was a highly bullish move. It was so bullish that BTC reached a new record high of $43,000
Musk then appeared to be tainting BTC when he announced in May 2021 that Tesla would cease accepting it as payment citing concerns about the environmental impact of Bitcoin mine.
TSLA stated in its April 2022 quarter report that it believes Bitcoin has “long-term value as both an investment and as a liquid option to cash”
It also warned shareholders about price fluctuations, which could impact its profitability. This seems to be a sign of Wednesday’s announcement.
“For example, we recorded $27 million in impairment losses in the first quarter 2021 resulting from changes to the carrying price of our Bitcoin and gains $128 million on some sales of Bitcoin by ourselves,” the company stated in an April 25 SEC filing.
