Tesla Holds Its BTC Position Steady Despite Quarterly Bitcoin Accounting Loss

Tesla maintained its Bitcoin treasury at 11,509 BTC throughout the second quarter, despite a 14% decline in Bitcoin’s price over the three-month period. The company reported mixed financial results, with revenue exceeding expectations while earnings fell below Wall Street forecasts.

The electric vehicle manufacturer disclosed an after-tax impairment charge of $112 million on its digital asset holdings in its latest earnings report. Tesla has not bought additional Bitcoin or sold any of its existing holdings since 2022.

Bitcoin began the quarter near $83,000 but dropped to approximately $58,000 by the end of June as macroeconomic uncertainty and broader weakness in risk assets weighed on the market. The cryptocurrency later recovered and was recently trading around $65,840.

Tesla remains one of the largest publicly listed companies with exposure to Bitcoin, although its holdings are considerably smaller than those of Strategy, which has continued aggressively increasing its Bitcoin reserves.

The company’s Bitcoin update came alongside a mixed second-quarter earnings performance. Tesla reported adjusted earnings per share of $0.33, missing analyst expectations of $0.55. Revenue totaled $28.2 billion, beating estimates of $27.6 billion.

The automaker posted a gross margin of 16.8% and generated GAAP net income of $1.11 billion. However, Tesla reported negative free cash flow of $1.1 billion for the quarter.

Under current accounting standards, companies holding cryptocurrencies must recognize losses when the market value of their digital assets declines. While Bitcoin has recovered from its late-June lows and recently traded near $65,840, Tesla’s impairment loss reflects the value of its holdings during the reporting period.

Tesla’s Bitcoin strategy has remained unchanged for almost four years. The company initially invested $1.5 billion in Bitcoin in early 2021 and briefly accepted the cryptocurrency as payment for vehicle purchases before ending the program due to environmental concerns.

In 2022, Tesla sold roughly 75% of its Bitcoin holdings but kept its remaining 11,509 BTC, which continues to remain on its balance sheet.