According to regulatory filings, Tesla’s bitcoin holdings were impaired by $204 million in 2022. The bitcoin trading profits of $64 million made up for the loss, leaving the automaker with a $140 million net loss.
During the first quarter of 2021, Tesla invested $1.5 billion in bitcoin, expressing its belief in the cryptocurrency’s longevity. At the time, the company claimed that bitcoin provided a better return on investment than more conventional central banks and was a great place to store cash that could still be accessed immediately. In fact, Tesla quickly reduced its position after making its initial acquisition by 10%, costing the automaker just $101 million.
The announcement that Tesla would begin accepting bitcoin as payment for Tesla vehicles was made by CEO Elon Musk in March 2021, which resulted in a significant rise in the value of the cryptocurrency. Musk and Tesla reversed that decision a few weeks later, expressing concern regarding the amount of energy required to mine bitcoin. After that, the price of bitcoin decreased.
Tesla purchased traditional currency with the proceeds from the sale of 75% of its bitcoin holdings the previous year as bitcoin’s value began to decline. The automaker may be waiting for a rebound with approximately $184 million worth of bitcoin holdings.
Over the past year, the cryptocurrency market has experienced a significant decline. Bitcoin’s current price of $23,045.50 is approximately 66% lower than its all-time high of $68,789.63. Some experts say that despite losing more than half of its value, bitcoin has remained resilient and may make a comeback. This is especially true as buyers who are scared by the crypto market generally gravitate toward household names and ecosystems that are more mature, like bitcoin or ether.
Tesla could not be reached for comment due to the dissolution of its press office.