Tesla announced its intention to sell automobiles using Bitcoin in February 2021, causing the crypto currency’s price to skyrocket, while also purchasing $1.5 billion in the cryptocurrency.
At the time of the investment, one BTC was worth approximately $43,000. Tesla CEO Elon Musk was then quite optimistic about the cryptocurrency’s future, stating that the company believes in the “long-term potential” of digital assets as an “investment and liquid alternative to cash.”
Bitcoin reached historic highs of around $70,000 by autumn, thanks in part to the billionaire’s fervent support for cryptocurrency.
However, the bear market would soon rear its ugly head and alter the landscape.
Tesla suffers a significant Bitcoin loss.
Forward to February 1st, 2023 – Bitcoin is currently trading at $23,133, having lost more than half its value since reaching an all-time high in the autumn of 2021.
Tesla has removed language from previous annual reports that appeared to indicate an optimistic stance on cryptocurrency investment.
Tesla reported a $204 million gross impairment loss on its Bitcoin holdings in 2022 in a regulatory filing with the US Securities and Exchange Commission on Tuesday.
The term “impairment” refers to a decrease or loss in the value of an asset. It could be caused by a change in economic conditions, such as the bear market that shook the market following Terra Luna’s implosion last May.
Tesla’s losses have more than doubled since 2021.
Tesla was one of the first companies to invest heavily in bitcoin. The automaker stopped accepting BTC payments for vehicle purchases in May 2021, as it began to lose faith in its investment due to the cryptocurrency’s high energy consumption.
According to a 2021 SEC filing, Tesla’s impairment losses have roughly doubled since 2021, when the carmaker declared a $101 million impairment on digital assets and a $128 million gain from the sale of Bitcoin.
Meanwhile, Elon Musk has previously stated that Tesla owns Dogecoin (DOGE), though the exact amount is unknown.
Tesla, headquartered in Austin, Texas, has never declared a purchase of DOGE, but the meme coin is accepted as payment for some of the company’s online-only services.
