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Elon Musk explained that this is an important and necessary action because of the lack of cash flow due to the impact of Covid – 19 in China.
Through the financial earnings report of the second quarter of 2022 at the dawn of July 21, the electric vehicle company Tesla said it had sold 75% of total Bitcoin holdings, equivalent to 936 million USD.
In early 2021, Tesla invested up to 1.5 billion USD in Bitcoin and decided to discharge 10% in the first quarter of the same year, earning a profit of 101 million USD. The company once claimed to accept electric vehicle payments in Bitcoin, but withdrew it in May 2021.
According to estimates at the end of the first quarter of 2022, the remaining BTC Tesla owns is worth 1.26 billion USD. However, the shock of the cryptocurrency market caused the amount of digital assets owned by Tesla to plummet, falling to $ 218 million by the end of June 2022.
During this time, Musk has repeatedly expressed his opinion that the company will continue to hold Bitcoin, such as posting a picture of the Diamond Hand, only those who hold the asset even if the price plummets.
However, the fact that the market crash period in May and June had a significant impact on Tesla’s Bitcoin investment when BTC at one time dropped to $ 17,000, while the company’s Bitcoin purchase price was initially estimated. falls in the range of 30,000 – 32,500 USD. According to some analysts’ calculations, with the sale of 75% of the investment to earn $936 million, Tesla’s Bitcoin selling price is at about $29,600, showing that the company has actively “cut loss” in mid-May, in the context of the whole industry in turmoil because of the collapse of LUNA – UST.
Speaking during a shareholder meeting, Elon Musk said that the act of selling $936 million in Bitcoin was not a move to “give up” the world’s largest cryptocurrency. The simple reason is that Tesla needs cash because of the difficulties affected by the Covid-19 epidemic in China.
“We are not selling any Dogecoins,” the Tesla CEO added.
Overall, Tesla’s second-quarter revenue fell 9.7% to $16.9 billion compared to the first quarter, while profit was $4.2 billion, down 22.5% compared to the first three months of the year. 2022.
Tesla’s momentum in profit by volume has “broken,” even though the last quarter saw the company raise prices twice. The hardest hit was due to the blockades in Shanghai – where Tesla has a large factory – which caused the number of cars to be delivered to customers plummeted.
In addition, the high fixed cost per vehicle as the price of raw materials increases, transportation is more difficult and expensive, which continues to create unfavorable conditions for the business.
Currently, CEO Elon Musk himself is also involved in a “gross” lawsuit with Twitter, potentially adjusting Tesla’s stock price. According to the judge’s latest decision, the time the Defendant must appear in court is in October, although Musk has tried to “buy time” until February next year.
Bitcoin price initially reacted negatively to Tesla’s announcement to sell Bitcoin, but quickly stabilized when billionaire Elon Musk promised to invest again in the future. Bitcoin is recovering impressively after shaking off negative news related to inflation in the US as well as rumors of whales about to discharge.
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