Tesla Earnings: Maintains Bitcoin Holdings and Focuses on AI

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Renowned electric car manufacturer, Tesla’s latest earnings call revealed that its Bitcoin bag remains untouched. It is the company’s fifth consecutive quarter without any changes, despite fluctuating crypto markets.

The recent quarterly results reveal a steadfast strategy; Tesla has neither bought nor sold any Bitcoin since its massive sell-off in Q2 2022, when it offloaded 75% of its holdings, reaping a substantial $936 million from over 30,000 BTC.

On the other hand, Tesla has made significant strides in exploring the potential of artificial intelligence. The company announced that it has more than doubled its computing capacity for AI projects.

It highlights the expansion of training data and the transition of its humanoid robot Optimus to AI systems.

“We have commissioned one of the world’s largest supercomputers to accelerate the pace of our AI development, with compute capacity more than doubling compared to Q2”

Tesla’s Bitcoin timeline

In 2022, Tesla estimated its Bitcoin holdings at $1.26 billion but later sold 75% of its holdings for approximately $936 million. It still retained digital assets worth $222 million on its balance sheet.

Tesla revealed in February 2023 that the company took losses of over $140 million due to its Bitcoin investments. The losses were from an impairment charge of $204 million and gains of $64 million from converting Bitcoin into fiat currency.

Its initial $1.5 billion investment in Bitcoin in 2021, made it one of the largest corporate holders of the cryptocurrency. Bitcoin fluctuated in value, resulting in a $43 million loss in the final quarter of 2022. Tesla’s love for its Bitcoin holdings continues to be a topic of interest for every crypto enthusiast.

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Lightning Labs Bringing Stablecoins to Bitcoin

Bitcoin layer-2 infrastructure firm Lightning Labs has released the mainnet alpha of Taproot Assets, a protocol aimed at enabling stablecoins and real-world assets to be issued on the Bitcoin and Lightning Network.

The current version, Taproot Assets v0.3, will provide a “feature-complete developer experience” to issue, manage, and explore stablecoins and other assets on the Bitcoin blockchain, according to Ryan Gentry, head of business development at Lightning Labs.

“We believe this new era for Bitcoin will see a myriad of global currencies issued as Taproot Assets, and the world’s foreign exchange transactions settled instantly over the Lightning Network.”

This version of Taproot Assets will work by routing through existing Bitcoin liquidity on the Lightning Network.

Gentry says the integration will extend Bitcoin’s network effects and move it one step closer to “bitcoinizing the dollar.”

European Central Bank Progresses Towards Digital Euro Launch

According to an announcement from the European Central Bank (ECB), the institution will proceed to the preparation stage for its digital euro initiative. This follows the conclusion of an investigation stage initiated by the ECB in October 2021, aimed at understanding the possible framework and distribution channels for a digital euro.

Per the ECB’s press release, the digital euro is planned to be available to both citizens and companies through regulated financial institutions like banks. The ECB’s design aims to create a digital alternative to physical cash that can be utilized for an array of online and offline transactions across the eurozone. The ECB points out that no existing digital payment mechanism combines all these characteristics.

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According to the ECB, the preparation stage is scheduled to commence on 1 November 2023, with an initial timeline of two years. During this period, the ECB will finalize the digital euro’s regulations and choose suitable companies to establish its technological infrastructure. The ECB also indicates that additional focus will be on testing the digital euro to meet both regulatory expectations and user demands, including factors such as user-friendliness, privacy, financial inclusion, and ecological sustainability. Public involvement and stakeholder engagement will continue through this stage. After the two-year window, the ECB will evaluate whether to proceed to further steps, laying the groundwork for a potential future launch of the digital euro.