After removing Bitcoin from its means of payment in May 2021, due to the harmful impact of the operation of the blockchain on the environment, Tesla decides to pursue its project of leaving the Metaverse definitively. While its February 2021 purchase in Bitcoin of 1.5 billion raised the value of the token, Tesla suddenly decided to put up to 75% of its holdings up for sale for the sum of 936 million. dollars.
Tesla, the American car manufacturer and incidentally one of the largest companies holding Bitcoin, decides to end its relationship with Bitcoin as a security measure. In its official announcement, the company said that it had suffered a significant loss in sales over the past two months. In addition to promoting global warming, the blockchain harms the development of society, which is very popular in the world of car construction. Still, comments on the company’s second-quarter balance sheet were mostly positive.
“At the end of the quarter, cash equivalents and short-term marketable securities increased successively by $902 million […] At the end of the second quarter, we converted approximately 75% of our bitcoin purchases into currency Q2 conversions added $936 million of cash to our balance sheet.”
In the same report, the company says it exceeded analysts’ expectations to reach a profit of $2.26 billion. However, the recent upheavals in cryptocurrency prices and the bearish outlook from analysts are casting doubt in Tesla’s head. In a context where everything suggests that the cryptocurrency universe is about to collapse, the company prefers to get ahead and leave the sinking ship while there is still a chance. Because, like most of the largest companies listed on the stock exchange, Tesla is also suffering the impact of numerous shortages and inflation due to the lack of oil.
For such a large company that currently owns approximately $218 million in digital assets, the cryptocurrency market represents risky investment ground. After the historic fall of Bitcoin (up to -66%), Tesla claims to have suffered a loss of 300 million dollars on its investment. The last two months have been particularly painful for the company, which has seen its equity in Bitcoin fall to its lowest level compared to the initial purchase. During this operation, the value of Bitcoin was estimated at $31,620. Tesla sees this as a real failure, as its equity in Bitcoin exceeded $3 million in November 2021. Since then, cryptocurrencies have continued to lose value and despite a positive balance sheet until December 2021, the American manufacturer has suffered the consequences of the historic drop in the price of cryptocurrency.