Tesla seems to be abandoning its ten-figure bitcoin bet amid a severe slump in cryptocurrency markets.
The electric-car maker said on Wednesday that it has sold approximately 75% of its bitcoin as of June 30. It said it converted $936 million worth of the cryptocurrency into fiat between April and June.
Tesla made waves — and sent the price of bitcoin skyrocketing — when it announced a $1.5 billion investment in the cryptocurrency in February 2021. A company of Tesla’s stature placing such a big bet on the burgeoning and volatile crypto market was unprecedented. Tesla held onto much of its stake as bitcoin soared to new heights by the end of 2021.
But the value of bitcoin has plummeted since amid a wider economic downturn. The currency has lost more than 50% of its value this year and took another sharp dive on Wednesday afternoon following Tesla’s announcement.
Elon Musk’s automaker said it still holds $218 million worth of the digital currency. It justified its initial purchase by saying that it was looking into liquid assets that had more upside than cash.
Tesla said it made $272 million on bitcoin sales early last year. Add that to the $936 million it offloaded this quarter and the $218 million it still held at the end of the quarter, and Tesla comes out roughly $74 million in the red on its bitcoin bet.
Tesla reported second-quarter earnings on Wednesday, beating analyst estimates but logging its first ever quarter-over-quarter decline in profit. A coronavirus lockdown in Shanghai severely limited Tesla’s ability to produce vehicles at its factory there, cutting its overall sales for the quarter