Cryptocurrency had suffered various crashes recently and this has affected many companies. What's happened with Tesla, the largest bitcoin holding in the world? Bitcoinist.com replies this question.
The automotive manufacturer Tesla had purchased bitcoin which was made public by CEO Elon Musk at a conference. Since then, the company has maintained its position in the digital asset, revealing that it had no intentions of selling its holdings. This has however come at a price as the cryptocurrency had suffered various crashes and dip that has left Tesla with a large impairment loss.
Tesla Reports $101 Million Impairment Loss
The year 2021 was no doubt a rollercoaster year for the financial markets. Even more so for investors in the cryptocurrency markets as multiple bull rallies and subsequent crashes had rocked the space. Institutional investors had also piled into the market, making their stake known and making millions of dollars in the process. However, as the saying goes, “if you don’t sell, you don’t lose/win.”
For Tesla, this has been the case. In last year alone the company had seen its holdings almost double in value when bitcoin had rallied to its new high at $69k. Subsequently, bitcoin had lost a good chunk of its value, bringing the value of Tesla’s bitcoin holdings down with it. In a recent report with the SEC, the electric vehicle maker reported approximately $101 million of impairment losses.
“We recorded approximately $101 million of impairment losses resulting from changes to the carrying value of our bitcoin and gains of $128 million on certain sales of bitcoin by us,” the report read.
This does not mean that the company lost $101 million though. Since they have not sold their bitcoins yet, this is basically an unrealized loss that Tesla is reporting. The company had previously stated that it plans to hold bitcoin on its balance sheet for the long-term and continues to do so.
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