Tesla, one of the largest institutional investors in BTC, published its financial results for the second quarter of 2021. It follows that they did not sell any of their Bitcoins, but also did not buy BTC.
Tesla did not sell any Bitcoin
Elona Musk´s Tesla announced that for the first time in the company’s history, its profits exceeded $ 1 billion, while it was able to produce more than 200,000 new cars during the period under review, which it describes as a great success.
As for BTC, its $ 1.5 billion investment in this cryptocurrency as of February 2021, due to the fall in the price of BTC, had a negative impact on its quarterly balance sheet as a loss in value $ 23 million. However, it is a significantly lower loss than estimates that were published on CNBC and speculated in the amount of around $ 100 million.
Tesla had to account for the investment in BTC as a loss because at the time of the quarterly balance sheet, BTC was lower than its price at the time Tesla bought it (around $ 32,000). At present, at a price above $ 36,000, they would no longer have to report this loss.
For publicly traded companies in the USA, BTC’s management on the balance sheets is handled relatively strangely. If the market price of BTC is in addition to its purchase price, they cannot account for that investment as a profit, since BTC is classified as an intangible asset for which a profit can be charged only if it is sold. However, if the market price of BTC falls compared to its purchase price, they must charge a loss. This is a fact that can theoretically demotivate the CEOs of large companies to invest in BTC, because even a possible increase in the value of BTC does not affect the value of the company from an accounting point of view until it is sold.
However, Elon Musk is clearly not bothered by these accounting complications and emphasizes that Tesla plans to hold BTC for a long time. It confirmed this best by not selling any BTC even during the turbulent months, when BTC lost over 50% of its price to historical highs.
From a $ 1.5 billion investment, Tesla sold 10% of BTC in the first quarter, which it bought to make sure it was liquid. Subsequently stated that the sale was carried out very quickly, which assured her that BTC was liquid.