December 2, 2023

Elon Musk’s company has continued to hold BTC reserves for the fourth consecutive quarter after being forced to divest 75% of its reserves in the second quarter of 2022.

Tesla Holds Bitcoin

Tesla, the electric car company led by billionaire inventor Elon Musk, recently announced that it has reserved bitcoin reserves for the second quarter of 2023. Tesla (TSLA) remains inactive in the bitcoin market, not buying or selling any cryptocurrency for the fourth straight quarter. The company’s earnings release after the market close on Wednesday confirmed the trend.

Tesla’s digital assets

At the end of the quarter, the value of Tesla’s digital assets held steady at $184 million, the same number as the past three quarters. In the second quarter, the bitcoin price rose slightly, from about $28,500 at the end of the first quarter to about $30,400.

Accounting regulations, however, limit Tesla from adjusting the valuation of its digital assets upwards in response to bitcoin price increases, unless those assets are sold. Still, if the price falls, even before any sales occur, the valuation could be lower.

Tesla’s bitcoin investment

Tesla originally acquired $1.5 billion worth of BTC in early 2021, which greatly boosted the demand and price of the cryptocurrency. CEO Elon Musk also announced at the time that the company would accept bitcoin payments for Tesla vehicles, further fueling interest in the cryptocurrency, which soon reached an all-time high. However, Musk quickly withdrew the proposal, declaring that BTC needs to be greener to make it happen.

Sell ​​75% of BTC

However, due to liquidity concerns, Tesla will have to divest a large portion of its BTC reserves in the second quarter of 2022. Affected by the new crown pneumonia (Covid-19) epidemic, Tesla’s Shanghai Gigafactory has been closed for more than two months, causing the company to face a severe liquidity must sold out More than 30,000 BTC, about 75% of its holdings at the time, earned a whopping $936 million, leaving about 9,720 BTC in its reserves.

In its latest report, the company revealed that it has not conducted any Bitcoin transactions since then, neither selling nor buying.Even during the major market turmoil in January 2023, the company continued to Hold BTCdespite accumulating $140 million loss Its net bitcoin holdings in 2022.

Tesla’s earnings report

Regarding financial results, Tesla reported adjusted EPS of $0.91 for the second quarter. The result beat analysts’ consensus estimate of $0.80, according to FactSet. In addition, the company’s revenue in the quarter reached 24.9 billion US dollars, beating analysts’ expectations of 24.2 billion US dollars.

Throughout the second quarter of 2023, Tesla’s Bitcoin holdings remained unchanged, indicating the company’s decision to stay on the sidelines in the volatile cryptocurrency market. Still, Tesla’s financial performance and stock price continue to demonstrate strength and resilience. As the electric vehicle industry continues to grow, investors and analysts are keeping a close eye on Tesla’s moves in both traditional markets and the ever-changing world of digital assets.

Disclaimer: This article is for informational purposes only. It does not provide or be intended to be used as legal, tax, investment, financial or other advice.