Market Analysis Report (26 Jul 2022)

Electric car maker Tesla has made a $64 million profit from the sale of 75% of its Bitcoin holdings in the second quarter of the year, while still posting a $170 million impairment loss over the sale.

Tesla spent $1.5 billion to acquire around 43,200 BTC in the first quarter of 2021. Later that quarter, it sold 10% of those coins for $272 million as an experiment to demonstrate BTC’s liquidity and utility.

Last week, the firm reported selling 75% of its BTC holdings during the second quarter for $936 million. Under accounting rules digital assets are considered “ “indefinite-lived intangible assets”, and as such, Tesla must value its BTC at its lowest point during the quarter and recognize a loss if it drops below its purchase price.

Vetle Lunde, an analyst at Arcane Research, estimates Tesla sold 29,060 BTC at an average price of $32,209, leaving the company with around 9,700 BTC on its balance sheet.