Tesla has dumped 75% of its bitcoin holdings a year after touting ‘long-term potential’

Tesla, led by Elon Musk, confirmed that it purchased about $ 1.5 billion in bitcoin in January and expects to start accepting it as a payment in the future.

The electric car maker invested more than one billion dollars in the digital currency. Three quarters of the company's holdings have been sold.

According to the company's second-quarter earnings statement, 75% of the company's purchases of Bitcoins have been converted into US dollars. The company had $936 million in cash on hand.

During last year's runup, Musk was a big fan of digital currencies, but now he is taking a break. In the last four months, the price of the digital currency has fallen by half.

In the first quarter of the year, the fair market value of the company's holdings of the digital currency was about $2 billion. The company didn't say what price it sold or how much of its impairment it had.

According to analyst Brian Johnson, there would be a $460 million impairment on the stock.

Musk said in an earnings call on Wednesday that it was important for them to maximize their cash position because they were unsure of when the Covids in China would end. He said that this shouldn't be seen as a judgement on bitcoin.

On the earnings call, Musk said that the main goal of the company was to accelerate the transition to sustainable energy, and that he didn't like the idea of a sideshow to a sideshow.

In the first quarter of 2021, when the company went big on the digital currency, they said it was a matter of becoming more flexible, diversified and picking up returns from their cash holdings. $101 million of profit was contributed by the company as the currency ran up.

Kirkhorn said at the time that the company's intent was to hold what we have long term and continue to accumulateBitcoin from transactions from our customers as they purchase vehicles.

In May of last year, Musk said that the company would no longer acceptcryptocurrencies for car purchases because of the environment. He credited the company's master of coin when he said the company had "diamond hands" when it came to investing in the digital currency.

A year is a long time.

The report was contributed to by CNBC.

CFRA's Garrett Nelson said that they are more concerned about the quarterly results ofTesla.