Tesla Suffers $204M Loss From Bitcoin In 2022
According to regulatory filings, Tesla suffered a $204 million impairment loss on its bitcoin holdings in 2022.
A profit from bitcoin trading offset the loss by $64 million, leaving the automaker with a net loss of $140 million.
Tesla stated that it believed in the long-term viability of bitcoin and had invested $1.5 billion in it during the first quarter of 2021.
The business claimed at the time that bitcoin offered a better rate of return on investment than more conventional central banks and was a great way to store money while still having immediate access to it.
In fact, Tesla quickly reduced its position after making its initial purchase by 10%, earning the automaker an instant $101 million.
To that effect, Tesla’s CEO Elon Musk announced in March 2021 that the company would begin accepting bitcoin as payment for Tesla vehicles, driving up the price of the digital currency.
A few weeks later, Musk and Tesla reversed course on that choice, citing worries about the amount of energy required for bitcoin mining.
Unfortunately after that, bitcoin’s value dropped.
Tesla sold 75% of its bitcoin holdings last year as the price of bitcoin started to fall, and the proceeds were used to purchase fiat currency.
The automaker currently holds about $184 million in bitcoin and might be waiting for a recovery.
Over the previous year, there has been a sharp decline in the value of cryptocurrencies. At $23,045.50, bitcoin is currently trading about 66% below its all-time high of $68,789.63.
Despite losing more than half of its value, some experts claim bitcoin has held up well and may even make a comeback, particularly as investors scared off by the cryptocurrency market as a whole turn to more established names and more established ecosystems, like bitcoin or ether.