- Elon Musk’s Tesla loses $440 million.
- Tesla accumulated $1.5 billion in Bitcoin in 2021.
Tesla is facing a decline of $440 million in its bitcoin holdings after a massive fall in the digital currency’s value. Bitcoin has been downtrend for the past few months. This is bad news for Tesla, which bought $1.5 billion in bitcoin in 2021.
This is part of an effort to move a portion of their cash reserves into the world’s number one cryptocurrency. Besides Tesla, several public companies that have converted a portion of their cash reserves to Bitcoin include MicroStrategy, Block Inc, and Coinbase.
Three months ago, the company recorded the value of its bitcoin at $1.26 billion. Although the market value of the holdings is close to $2 billion, accounting practices mean that the company does not register gains on its investments until it is sold.
With the recent drop in bitcoin prices on the last day of Tesla’s second financial quarter Q2, the company’s holdings are now around $820.8 million. Elon Musk’s Tesla is likely to post a loss of around $440 million on its bitcoin holdings, 9% of the car company’s annual profit in 2021.
Major Setback in Crypto Market
The cryptocurrency’s price has fallen 60 percent from $46,700 at the start of the year and around 75% from an all-time high in November. Rising interest rates and inflation have dampened interest in digital assets, while a series of crises at cryptocurrency companies have also weighed on prices. Several crises affected the cryptocurrency market such as Celsius Network, Terra project, and CoinFLEX.
Yesterday, the price of bitcoin was $19,760 and today BTC is up 1.24% in the last 24 hours and traded at $19,891.02 with a trading volume of $24,969,092,065.
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