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Saturday April 13, 2024

Tesla's bitcoin holdings suffered $140 million net loss in 2022

Musk has been one of most prominent proponents of cryptocurrencies and his comments on social media frequently spark large trading activity

By Web Desk
February 01, 2023
Cars parked in front of company building. — Pexels
Cars parked in front of company building. — Pexels

Tesla lost $140 million on its Bitcoin bets in 2022, reported the BBC.

The electric vehicle manufacturer informed the US authorities that while it had lost $204 million overall on Bitcoin, it had made up that amount through trading.

Early in 2021, Tesla invested $1.5 billion in Bitcoin after CEO Elon Musk predicted that it would be used for payment. A few weeks later, it made a U-turn, and Tesla has now sold the majority of its Bitcoin holdings.

Currently, it has roughly $184 million in Bitcoin.

Musk has been one of the most prominent proponents of cryptocurrencies, and his comments on social media frequently spark large trading activity. Due to Tesla's purchase of Bitcoin in February 2021, the value of the digital currency increased by more than 25% to $48,000, which was a then-record high.

Musk said Tesla had sold 10% of its bitcoin as of June 2021.— Twitter screenshot via The Verge
Musk said Tesla had sold 10% of its bitcoin as of June 2021.— Twitter screenshot via The Verge

When Elon Musk announced that Tesla would permit people to purchase cars with Bitcoin in March 2021, it once again increased. This made it possible for US citizens to secure orders with the equivalent of a $100 Bitcoin deposit.

But when the company changed its mind about this plan two months later, citing climate change worries, the cryptocurrency then dropped by more than 10%.

The UK Treasury believes that the yearly energy usage of Bitcoin worldwide is equivalent to 39% of that of the UK; some estimates place the figure considerably higher.

When Tesla chose to sell off the majority of its interests, its price plummeted by more than 50% from a peak of about $70,000 in November 2022.

Between the time Tesla announced its original acquisition and now, bitcoin's value has generally decreased, The Verge reported. The price of the cryptocurrency is now approximately half of what it was when Tesla first announced its commitment. Currently, it is valued at somewhat less than $23,000, down from over $40,000 when the purchase was first disclosed in early February 2021. Bitcoin reached a high price of almost $65,000 in November 2021.