Tesla has recorded a $204 million impairment loss on its bitcoin holdings in 2022, according to regulatory filings. This loss was offset by his $64 million gain from bitcoin trading, leaving the automaker with his $140 million net loss.
Tesla said it believed in the longevity of the cryptocurrency, investing $1.5 billion in Bitcoin in the first quarter of 2021. At the time, the company said Bitcoin was a great place to store and quickly access cash, offering a better return on investment than traditional central banks. In fact, after the first acquisition, Tesla quickly shrunk the position by 10% of his, quickly making the automaker his $101 million.
In March 2021, CEO Elon Musk said Tesla would start accepting Bitcoin as payment for Tesla cars, prompting a surge in the price of the cryptocurrency. A few weeks later, Musk and Tesla reversed their decision, expressing concern over the amount of energy required to mine bitcoin. After that, the price of Bitcoin fell.
Last year, as the value of Bitcoin began to plummet, Tesla sold 75% of its Bitcoin holdings and used the proceeds to buy traditional currencies. Automakers currently hold about $184 million worth of Bitcoin, which could be waiting for a recovery.
The crypto market has experienced a dramatic decline over the past year. Bitcoin is currently trading at $23,045.50, about 66% below its all-time high of $68,789.63. Some experts believe that Bitcoin has remained resilient despite losing more than half of its value, and that buyers, especially those who feel uneasy about the cryptocurrency market, are selling common names and bitcoin. It said it could make a comeback as it gravitates toward more mature ecosystems such as Ethereum and Ether.
Tesla dissolved its press department and was not immediately available for comment.
