Tesla’s regulatory filings reveal a net loss of $140 million from its bitcoin investments in 2022, after recording a $204 million impairment loss and offsetting it with $64 million in profits from bitcoin trading. Despite the loss, Tesla still has faith in the longevity of cryptocurrencies and currently holds $184 million worth of bitcoin.
In Q1 2021, the automaker made a bold move by investing $1.5 billion in bitcoin and expressing confidence in the cryptocurrency as a means of storing cash with higher returns compared to traditional banks. Tesla even trimmed its position by 10% to quickly earn a $101 million profit.
However, the crypto market has been tumultuous over the past year, with bitcoin’s value dropping 66% from its all-time high of $68,789.63 to its current trading price of $23,045.50. Despite the decline, some experts believe bitcoin may still experience a resurgence, especially as buyers flock to well-established cryptocurrencies like bitcoin and ether.
Tesla’s CEO Elon Musk caused a stir in the crypto world in March 2021, announcing that Tesla would start accepting bitcoin as payment for its vehicles. However, the automaker soon reversed its decision due to concerns over the energy consumption of bitcoin mining.
In the face of these fluctuations, Tesla sold 75% of its bitcoin holdings and used the proceeds to buy traditional currency. It remains to be seen whether the automaker will hold on to its remaining bitcoin holdings for a potential rebound in the crypto market.