What a difference a year makes. After making big plays in Bitcoin in 2021, Tesla jettisoned $936 million worth of the cryptocurrency in the second quarter of 2022, trimming its Bitcoin holdings by 75%, the company said in new investor filings.
Tesla aggressively embraced Bitcoin in 2021, investing $1.5 billion in the currency as CEO Elon Musk touted Bitcoin’s advantages over standard fiat currency. For part of the year, Tesla customers could buy cars using Bitcoin.
But in recent months, Tesla’s profitability was affected by “Bitcoin impairment,” it said in its financial summary of the second quarter.
Bitcoin soared to delirious highs in 2021
The closely watched car company’s moves fueled a surge of interest in the cryptocurrency, with Bitcoin shooting to record highs in 2021. Tesla directly benefited, as it locked in more than $100 million in profits from its crypto investment.
Bitcoin, which is notoriously volatile, was already on the upswing before Tesla announced its moves in February of 2021. The cryptocurrency’s value quickly soared by tens of thousands of dollars.
Tesla suspended its Bitcoin vehicle sales in May of 2021, citing the environmental impact from the extensive use of coal and other fossil fuels to mine the cryptocurrency. But after a mid-summer swoon, Bitcoin rose again in autumn to an all-time high of $68,990.90, according to Coindesk.