When Tesla Inc TSLA announced second-quarter earnings after the market close Wednesday, the electric automaker revealed it has sold off 75% of its Bitcoin BTC/USD position.
What Happened: The company netted $963 million from the sale of its Bitcoin after citing an impairment loss of $101 million on its Bitcoin position in 2021.
Last year, Tesla announced that it purchased $1.5 billion of the cryptocurrency, which puts the company’s cost basis at $1.125 billion for the 75% of Bitcoin it sold for a loss.
Why It Matters: Tesla led the way for institutions to gain exposure to Bitcoin last year. After CEO Elon Musk announced Tesla had purchased Bitcoin on Twitter, the price surged on investor expectations of more institutional investment in the cryptocurrency.
While the markets have already faced selling pressure from Tesla’s Bitcoin sale, the news may lead other investors to follow suit.
See Also: Is Bitcoin Still a Good Investment In 2022?
That being said, Musk remains a believer in Bitcoin and the wider cryptocurrency markets. He has also publicly stated that Tesla will resume accepting Bitcoin once the network is powered mainly by renewable energy sources, which has yet to be seen.
TSLA Price Action: Tesla shares were trading 0.33% higher at $744.94 in after-hours trading Wednesday, while Bitcoin was down 0.61% at $23,085.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
