The Giants Lost $5 Billion In Q2 Because Of Bitcoin Bets

Bitcoin (BTC) bets by Tesla, MicroStrategy, and Block Inc resulted in a $5 billion loss on the books in Q2 as BTC dropped 59% in the same period.

MicroStrategy

MicroStrategy accounted for 70% of the $5 billion loss as the company spent around $4 billion buying 129,699 BTC. The business intelligence firm’s loss is estimated at $3.4 billion.

However, that hasn’t stopped the company and CEO Michael Saylor from ramping up. MicroStrategy’s most recent purchase was $10 million (480 BTC) on June 29.

Tesla

Tesla said on July 20 that it sold 75% of its BTC holdings for $936 million in cash, with an average selling price of $29,714.

Meanwhile, Tesla revealed that the loss from investing in Bitcoin affected their profits.

Despite the loss, Elon Musk hinted that the electric carmaker is still open to buying more BTC in the future and that the company’s decision to sell should not be taken as a “judgment.”

Block Inc.

Block Inc., led by Jack Dorsey, held $336 million in Bitcoin on March 31. Coingecko data indicates that the current value is only around $190 million – a loss of $146 million in Q2.

The loss doesn’t seem to discourage Dorsey, who has continued to spread Bitcoin. The Twitter founder recently teamed up with Jay Z to set up an educational program tagged Bitcoin Academy to raise awareness of cryptocurrency in underdeveloped areas.

Expert’s point of view

According to experts, the loss shows that these companies take a lot of risks when buying a volatile asset like Bitcoin. Matt Maley added that BTC holders would likely make the decision to sell if it experiences another significant drop.

However, crypto enthusiasts like Justin Sun said Tesla’s ability to sell nearly $1 billion in BTC shows liquidity in the market, and he expects “much larger corporations” to buy assets in the future.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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