Tesla's decision to empty most of its Treasuries of Bitcoin (BTC) generated huge profits for the company in the second quarter, even as cryptocurrency prices plummeted in the bear market.
According to Cointelegraph, in the first six months of 2022, Tesla recorded $170 million in impairment losses resulting from changes in the book value of its bitcoin holdings, according to an official Form 10-Q document with the SEC. After selling 75% of its dollar-denominated bitcoin balance in the second quarter, the company made a profit of $64 million.
In finance, an impairment loss occurs when the fair value of an asset the company is holding falls below the carrying amount of the investment.
Tesla reported earnings per share of $2.27 in the second quarter on revenue of $16.93 billion. Although profitability decreased compared to the first quarter, it was higher than last year's levels. However, the company's profitability was negatively affected by rising inflation and increased competition for battery cells.
The electric car maker still has 10,800 BTC on its books, according to Bitcoin Securities. With a current price of around 22,000 bitcoins, Tesla's digital assets are worth about $237 million.
The 10-K disclosure did not reveal any new insights into Tesla's digital asset strategy. However, the Company stated that it may increase or decrease its holdings of digital assets over time: as with any investment and consistent with how we manage our cash-based cash and cash equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on the needs of the business And on our view of the market and environmental conditions.
