Is Tesla’s bitcoin revelation impacting crypto prices?

July 31, 2021 02:31 AM AEST | By Ankit Sethi

Is Tesla’s bitcoin revelation impacting crypto prices? — Image source: Jirattawut Domrong,Shutterstock

How was this income earned?

What should concern investors and other stakeholders is how this income was generated. Often criticized from earning a major chunk of revenues from sale of regulatory credits to fossil fuel-burning car makers, in the April-June quarter 2021, this was only 3.5 per cent of revenue generated.

The US$1.14 billion net income came from delivery of over 200,000 vehicles in Q2, confirmed in a tweet by CEO Elon Musk on July 2.

The bitcoin mention

The most interesting part of earnings is what Tesla reported under the ‘restructuring’ sub-head. It included US$23 million impairment on account of bitcoin holdings of the company.

This comes in the backdrop of the recently-held ‘B Word’ conference where Musk revealed his personal holdings of bitcoin, Ether, and Dogecoin. At the same event, Jack Dorsey, the co-founder of Twitter, said bitcoin can bring world peace and may become the ‘native currency’ of internet.

Image source: Pixabay

Bitcoin has recently gained

Lately, a job posting related to cryptocurrencies by Amazon lifted bitcoin above US$40,000. In April, the cryptocurrency had reached nearly US$65,000, but negative forces like a crackdown in China brought it below US$30,000.

The most popular cryptocurrency has regained some lost ground over past couple of days.

Here are some key statistics about Bitcoin. The year-to-date return is over 27 percent, and the all-time high value is US$64,829. On July 27, 2021, one bitcoin can be brought for nearly US$38,000.

How the Tesla’s earning report will impact the value of bitcoin has yet to be seen. CEO Musk has lately reassured crypto enthusiasts in the B Word conference. Tesla’s earning report stating US$23 million impairment on bitcoin may dim the outlook.

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