Tesla Eats Paper Loss on Bitcoin Holdings While Strategy Sells

Tesla's second-quarter earnings report revealed a $112 million after-tax loss on its Bitcoin holdings, despite not selling any coins. The company's 11,509 BTC remained untouched as the price of Bitcoin slid roughly 14% from around $83,000 in early April to $58,000 by the end of June.

The quarterly earnings report showed that Tesla's Bitcoin holdings closed the quarter marked at $674 million, down from $786 million in March. The company hasn't bought or sold a coin since 2022, making its four-year streak the longest period of inactivity among corporate Bitcoin holders.

According to accounting rules, companies must mark digital assets to market every reporting period, resulting in an immediate loss on their income statement when the price drops. This means that Tesla's $112 million loss is essentially a paper loss, not a cash outlay.

Contrastingly, Strategy, another prominent corporate Bitcoin holder, sold 3,588 BTC for approximately $216 million between June 29 and July 5 to fund dividends on its preferred securities. Strategy's executive chairman, Michael Saylor, remains committed to the long-term value of Bitcoin, stating that 'corporate adoption is necessary' for its success as a global monetary network.