Tesla dumped 75% of its Bitcoin holdings at one of the worst possible times – losing out on billions of dollars in gains.
Bitcoin has been trading at near record prices and gained 80% over the past year, pushing digital assets owned by the automaker to a valuation of $1.24 billion.
That’s far above the $722 million they were worth this time last year.
But Tesla sold 75% of its holdings in mid-2022, when the digital currency was trading at a mere fraction of its current price of $115,000.
If Tesla had held onto all of its Bitcoin, it would be worth roughly $5 billion, according to a CNBC report.
The $936 million worth of Bitcoin the company converted to cash would be valued at over $3.5 billion.
Tesla did not immediately respond to The Post’s request for comment.
Billionaire owner Elon Musk has made it clear that Optimus humanoid robots and robotaxis are the future of Tesla, but these are pricey and risky bets – and Tesla could use an extra boost of cash.
The automaker on Wednesday reported its worst sales drop in a decade and earnings that missed Wall Street estimates.
Tesla has also been steadily losing overseas market share to Chinese rivals, like electric vehicle maker BYD.
Shares in Tesla plummeted 8% on Thursday, though it gained about 5.5% Friday.
The stock is down about 15% so far this year, while most tech stocks and the Nasdaq have been on an upward tear.
President Trump’s tariffs and the end of federal EV tax credits are also expected to hit the company hard.
The company’s Bitcoin holdings have helped with profitability, with gains of $284 million in the second quarter when its total net income was $1.17 billion.
But it would have enjoyed even greater gains had Tesla held onto its original holdings.
The automaker invested $1.5 billion in Bitcoin in early 2021 as Musk became an outspoken supporter of the digital currency online.
Bitcoin exploded 20% in a day in January 2021 after Musk added #bitcoin to his account on Twitter, now known as X. Musk took over and rebranded the social media platform the following year.
In mid-2022, however, interest rates were on the rise and inflation was stubbornly high. Investors grew afraid of risky bets like cryptocurrency.
Tesla announced in the second quarter of that year that it sold 75% of its Bitcoin holdings to add cash to its balance sheet.
Bitcoin plummeted 60% in 2022, but it has since sharply turned around, experiencing steep gains as Trump has spun himself as a pro-crypto administration and made promises to create a strategic Bitcoin reserve.
Credit: Source link
