Tesla sold 75% of its Bitcoin, worth approximately $936 million, according to its Q2 earnings report.
In its after-market earnings announcement, the electric car manufacturer founded by Elon Musk said in a shareholder presentation that “Bitcoin impairment” had a negative impact on its profitability during the second quarter, when it posted $2.5 billion in operating income.
The crypto market immediately reacted to the news.
Bitcoin (BTC), which made it above $24,000 on Wednesday, dropped sharply right after markets closed at 4 p.m. Eastern Time. It was trading at $23,078.18 at the time of writing, down 2.5% in the last hour, according to CoinMarketCap.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, was also down 3% in the last hour following the news from Tesla’s earnings report.
Tesla and Musk have had an on-again, off-again relationship with Bitcoin.
The electric vehicle company invested $1.5 billion in Bitcoin in February 2021, after changing its investment policy in January to allow it to hold digital assets. It was seen as a very bullish move at the time. So much so that BTC hit what was then a new all-time high of $43,000.
Then, in May 2021, Musk seemed to sour on BTC as he announced that Tesla would stop accepting it as payment, citing concerns over the environmental impact of Bitcoin mining.
Tesla & Bitcoin pic.twitter.com/YSswJmVZhP
— Elon Musk (@elonmusk) May 12, 2021
In its 2022 first quarter report, filed in April, TSLA wrote that it believes in Bitcoin’s “long-term potential of digital assets both as an investment and also as a liquid alternative to cash.”
But it also warned shareholders that price changes tend to impact its profitability, which now seems like a harbinger for Wednesday’s announcement.
“For example, in the first quarter of 2021, we recorded approximately $27 million of impairment losses resulting from changing to the carrying value of our Bitcoin and gains of $128 million on certain sales of Bitcoin by us,” the company wrote in its April 25 SEC filing.