Tesla's Q2 2022 Shareholder Deck includes an interesting disclosure regarding the offloading of the majority of the company's Bitcoin holdings. More specifically, the EV maker announced it sold almost 75% of the Bitcoin it had.
"As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet."
That's a lot of money, but Tesla noted that the transaction put a dent into its profitability as Bitcoin lost significant value since the EV maker bought $1.5 billion worth of the cryptocurrency in February 2021.
Among the negative factors that impacted its Q2 2022 profitability, Tesla listed "Bitcoin impairment" at the bottom of the list, under higher raw material, commodity, logistics and expedite costs, higher per unit fixed costs in Shanghai due to lockdowns and negative FX impact.
Fortune estimates that Tesla only lost around $162 million from its initial Bitcoin investment, based on the difference between the $936 million conversion of Bitcoin into fiat and the $1.125 billion representing 75% of its initial $1.5 billion holdings.
Tesla's decision to dump a majority of its Bitcoin holdings may seem surprising, especially after Elon Musk said in March 2022 that he would hold onto the cryptocurrencies he owned.
"I still own & won’t sell my Bitcoin, Ethereum, or Doge fwiw," Musk tweeted on March 14.
Tesla appeared to adopt the same attitude to cryptocurrencies, at least judging from this excerpt from its first quarter earnings report earlier this year.
"We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash."
In June, Musk seemed to have a change of heart regarding cryptocurrencies. He told Bloomberg at the Qatar Economic forum that he didn't advise people to invest in crypto. "I have never said that people should invest in crypto." Interestingly, by the time he made that remark, Tesla had probably already sold 75% of its Bitcoin holdings.
Bitcoin dropped about 2% on the news of Tesla's sale. The cryptocurrency lost nearly 66% from its highs of about $69,000 in November 2021, currently trading above $22,000.