Tesla’s Bitcoin (BTC) Sales: Did They Turn a Profit?
Tesla’s Bitcoin Holdings Show $108 Million Net Profit So Far in 2022
Luxury car brand Tesla has made a net profit of $108 million from its Bitcoin holdings so far in 2022, despite disposing of about 75% of its total Bitcoin assets to make a profit of $64 million in Q2 2022. The company had purchased Bitcoin worth $1.50 billion in February 2021, and had sold $1 billion worth of it in July 2022, earning an additional $500 million if it had waited until today for the sale since Bitcoin has gained more than 50 percent in value since then.
Tesla had sold $272 million worth of Bitcoin in Q1 2021, accounting for about 93% of its free cash flow in the same quarter. Similarly, its sales of Bitcoin worth $936 million in Q2 2022 coincided with a period when free cash flows decreased by 73% compared to the previous quarter. These sales show that Elon Musk relied on Bitcoin as a haven during Tesla’s cash-strapped times. However, Wall Street analysts have forecasted Tesla’s free cash flow in Q1 2023 to be around $2 billion, up 40% from the previous quarter, which could reduce the likelihood of selling its remaining Bitcoin holdings.
Tesla currently holds 10,725 BTC worth approximately $330 million, almost 15% below its purchase value in February 2021, and is hovering above an unrealized loss of about $56.6 million in its remaining BTC holdings. Nevertheless, Tesla’s earlier Bitcoin purchases have proven to be profitable, and it remains to be seen if the company will sell its remaining Bitcoins or hold onto them for longer.
Disclaimer: This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should do their own research when making a decision.
