Will Bitcoin Hold Above $40,000? Tesla Releases New Earnings Report — Did Musk Lose Money?
Since Bitcoin fell below $40,000 on May 21, the $40,000 level has become a key battleground between bulls and bears. Over the following two-plus months, the market has tested the $40,000 level several times but failed to hold it each time. In mid-June, after Bitcoin failed its test of $40,000 once again, market sentiment weakened, with consecutive daily declines reaching a low of $28,808.0 — the lowest point of the second quarter.
Currently, $30,000 and $40,000 have become the two benchmark levels in investors' minds. Dropping below $30,000 triggers "bearish talk of $20,000," while crossing above $40,000 brings "the bull market is back" exclamations. This time, following Amazon's stated intent to accept Bitcoin Payment (since denied), Tesla and Visa releasing upbeat earnings reports, and the Fed stating at its post-FOMC press conference that it would "maintain its loose monetary policy, with inflation expected to be 'higher and more persistent,'" Bitcoin is once again testing the critical $40,000 level. Can Bitcoin successfully hold this time?
Tesla and Visa Earnings Released — Mixed Market Reaction
On Monday, July 26 (U.S. local time), Tesla released its second-quarter earnings report. The data shows Tesla's automotive segment generated $11.958 billion in total revenue for Q2, representing a 98% increase compared to $6.036 billion in the same period last year. Net income attributable to common shareholders was $1.142 billion, significantly higher than $438 million in Q1 and $104 million in the same quarter last year, driven primarily by rapid business growth and cost reductions.
On the crypto assets front, Tesla's balance sheet shows that as of June 30, the company held Bitcoin with a net value of $1.311 billion, with Bitcoin-related asset impairment of $23 million.
The cash flow statement reveals that Tesla neither accumulated nor sold any crypto assets during Q2. Back in February, the company announced it had purchased $1.5 billion worth of Bitcoin, but subsequently sold 10% of its Bitcoin holdings, which boosted Q1 earnings by $272 million and net income by $101 million. Tesla CEO Elon Musk stated that this move was solely to demonstrate Bitcoin's liquidity as a substitute for cash.
By combining Tesla's Q1 and Q2 earnings reports, we can estimate the number of Bitcoin Tesla holds and its average cost basis. Let's cut to the conclusion: Tesla currently holds approximately 41,800 Bitcoin, with an average cost basis of $29,400. Below is our detailed calculation process.
Fortune reported that according to the Financial Accounting Standards Board, crypto assets are classified as "intangible assets with an indefinite useful life." This means companies have considerable flexibility in how they account for crypto assets on their balance sheets, with two main methods available. The first compares the Bitcoin purchase price with the fair market value at quarter-end. For example, if the Bitcoin price on June 30 is lower than Tesla's average purchase price, an "impairment" must be recorded, with the impairment amount equaling the "purchase price" minus the "quarter-end market price." If there are gains, they are calculated based on the purchase cost. The second method is the continuous impairment method: whenever Bitcoin's market price falls below the purchase price of any portion of coins held during the quarter, impairment must be recorded. For instance, if Tesla purchased some Bitcoin at the beginning of February at $35,000, and Bitcoin crashed to $31,000 on May 19, then that portion of Bitcoin would require a $4,000 impairment charge. Even if Bitcoin later rebounds above $31,000, Tesla cannot re-record the gain or eliminate the impairment — it remains permanent.
From Tesla's Q1 earnings report, we can see that Tesla sold 10% of its holdings during Q1, generating $272 million in revenue and $101 million in net income. Despite Bitcoin surging for most of Q1, with Bitcoin closing at $59,286.3 on March 31, Tesla still recorded a $27 million impairment charge. This indicates that a small portion of Tesla's Bitcoin fell below its original cost, triggering the impairment. Therefore, we can conclude that Tesla uses the second method — the continuous impairment approach.
With Tesla's accounting method now confirmed, the subsequent calculation is straightforward. Tesla previously disclosed that as of March 31, its Bitcoin holdings were valued at $2.48 billion. OKX's real-time market data showed Bitcoin's closing price at $59,286.3 on that date, allowing us to estimate that Tesla held approximately 41,800 Bitcoin (since Tesla neither accumulated nor sold any Bitcoin during Q2, this figure also represents Tesla's current Bitcoin holding). Given that Tesla previously sold 10% of its holdings, we can calculate that Tesla held a maximum of 46,400 Bitcoin at peak. Combined with its stated purchase of $1.5 billion worth of Bitcoin, we can further derive an initial average cost of $32,300.
Since Tesla has already sold 10% of its Bitcoin and received $272 million, we can calculate the current average cost of Bitcoin as: ($1.5 billion - $272 million) / 41,800 = $29,400. This $29,400 represents Tesla's current average cost basis for Bitcoin.
Tesla's Q2 earnings report put the crypto community's nerves at ease. The results align with Musk's remarks at The B Word conference: "I want to see Bitcoin succeed, and I might buy more, but I won't sell, and I will certainly never do anything like pump-and-dump." As of writing, Bitcoin is currently trading at $40,018.6, giving Tesla an unrealized gain of 36.1%.
That said, it's worth noting that throughout Q2, while Bitcoin did experience a scary dip to $28,808.0, it mostly stayed comfortably above Tesla's cost basis. Should the market turn downward in the future, given capital's profit-seeking nature, it's uncertain what actions Tesla might take. The possibility of taking profits cannot be ruled out. If this occurs when the market is already in a weakened state, Tesla's selling could further dampen sentiment and push the market lower. This could potentially become a "hidden bomb" for the crypto market.
In addition to Tesla, payment giant Visa also released its Q3 earnings report on Tuesday (U.S. local time). Note: The U.S. government uses a 12-month fiscal year without specifying start or end dates, so U.S. companies typically select their own fiscal year start dates based on industry characteristics and business conditions. This can result in mismatches with the calendar year, meaning that even though we are currently in Q2 of the calendar year, some companies may already be reporting Q3 — this is not a time travel error. The company's revenue and earnings per share both exceeded analyst expectations. Bloomberg noted that this was driven by a recovering global tourism industry, massive economic stimulus checks, and the crypto boom.
The earnings report shows that Visa's Q3 revenue surged 27% year-over-year to $6.13 billion, beating expectations of $5.86 billion. Cross-border consumer spending — a key metric for Visa's business — surged 47% year-over-year. Excluding tourism spending, online cross-border spending rose 56% year-over-year, improving 12 percentage points from the previous quarter, with much of the growth driven by crypto asset purchases. It's reported that crypto asset spending boosted Visa card total transaction volume by 34% year-over-year to $2.72 trillion, surpassing Bloomberg analysts' expectations of $2.57 trillion.
Although Visa's Q3 earnings were positive, CFO Vasant Prabhu issued a warning, noting that the company has observed a moderation in crypto asset purchase activity: "Especially in April and May, crypto asset purchases saw considerable growth, but by June it had already started to decline." Therefore, if crypto market prices fail to show significant upward momentum going forward, Visa's crypto business may struggle to sustain its current levels.
On July 29, another payment company, PayPal, stated at an investor update call that it would launch a super app with crypto asset functionality, with plans to fully roll out the wallet in the United States over the coming months.
Bitcoin Tests the Critical $40,000 Level Once Again
On July 20, Bitcoin's price tested the $30,000 support level for the third time since the May 19 extreme market event. After confirming the validity of this support within a single day, Bitcoin proceeded to stage a weekly-chart-level rally. According to OKX market data, as of July 29 at 15:40, Bitcoin was trading at $40,018.6, representing a 36.8% gain from its July 20 low.
As Bitcoin's price returns to the $40,000 level, we've also observed a notable recovery in Bitcoin's market dominance. Tradingview data shows Bitcoin's market cap dominance has reached 48.98%, up nearly 10 percentage points from its May low of 39.66%. The simultaneous rebound in Bitcoin's price and its market dominance is a highly positive sign for maintaining short- to medium-term crypto market stability.
Additionally, looking at Bitcoin's on-chain flow data, since July, Bitcoin held in exchange addresses has shown a trend of net outflows exceeding net inflows. Glassnode data reveals that from July 1 to July 28, exchange addresses recorded a net outflow of 66,800 Bitcoin, with over 60,000 Bitcoin flowing out in just a single day on July 28 alone.
Driven by Bitcoin's price rebound, the total crypto market cap has also improved. CoinMarketCap data shows the current total crypto market cap stands at $1.55 trillion, representing a 32.5% gain from its Q2 low.
Weibo user AHR999, creator of the AHR999 Bitcoin accumulation indicator, commented that Bitcoin, after briefly entering the dollar-cost averaging (DCA) zone, has re-entered a strong uptrend phase. Based on historical patterns, if the market enters a bear market, it typically takes several years before returning to the uptrend zone — so this is a sign that the bull market has not yet ended.
On July 27, Santiment tweeted that since Bitcoin's price crash in May, whales holding between 100 and 10,000 Bitcoin have been continuously accumulating. These addresses have accumulated over 130,000 Bitcoin over the past five weeks, and an additional 40,000+ Bitcoin in the past 10 days alone. As we can see, large wallets have been continuously buying throughout May to July. While this doesn't guarantee Bitcoin's price will rise in the future, historical patterns show that whales mostly accumulate at lows and sell at highs.
As things stand, whether Bitcoin can firmly hold the $40,000 level is a critical juncture. If it succeeds, market sentiment will shift noticeably bullish, paving the way for an upward push. If it fails to hold, Bitcoin may revisit the $30,000 support level. As always, markets move swiftly and anything is possible — no one can predict the market with 100% accuracy. What we can do is form our own judgments and let the market be the ultimate validator. Win or lose, each experience is an opportunity to refine and strengthen your own investment framework.
Disclaimer
This article may contain product content not applicable to your region. This article is provided for general informational purposes only and makes no responsibility for any factual errors or omissions. This article represents the author's personal views only and does not reflect the views of OKX. This article is not intended to provide any advice, including but not limited to: (i) investment advice or investment recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holdings in digital assets (including stablecoins) involve a high degree of risk and may fluctuate significantly, or even become worthless. You should carefully consider whether trading or holding digital assets is appropriate for you based on your financial situation. For questions specific to your circumstances, please consult your legal/tax/investment professional. The information contained in this article (including market data and statistics, where applicable) is provided for general reference purposes only. While all reasonable precautions have been taken in preparing this data and these charts, we assume no responsibility for any factual errors or omissions expressed herein. © 2025 OKX. This article may be reproduced or distributed in its entirety, or excerpts of 100 words or less may be used, provided such use is for non-commercial purposes. Any reproduction or distribution of the full article must prominently state: "This article is copyrighted © 2025 OKX, used with permission." Permitted excerpts must cite the article name and include attribution, e.g., "Article name, [author name (if applicable)], © 2025 OKX." Some content may have been generated or assisted by artificial intelligence (AI) tools. Derivative works and other uses of this article are not permitted.
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