Bitcoin: Tesla loses $140 million in BTC by 2022, Elon Musk stoic

Bet on Bitcoin – It’s here strategy chosen by Tesla for several years now. And, during this ice age, the society ofElon Muska strong supporter of DogeCoin, recorded a net loss of $140 million with its investments in bitcoin (BTC). This significant loss, such as drop in the price of the king of cryptocurrencies, however, does not seem to have a significant impact on the company’s finances, which benefits from a solid balance sheet. Fasten our seatbelts: explanations.

Tesla and an off-the-shelf approach: investing in bitcoin

Let’s not rush and start our business from scratch. You are here is known for bold and innovative approach in terms of investment. In January 2022, the company even announced that it would invest $1.5 billion in bitcoins. Payments in cryptocurrencies are at least once on the agenda for Elon Musk’s electric cars.

However, in the face of bitcoin evidence that also affects institutions, Tesla saw investing in BTC as a way to diversify and maximize long-term returns.

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A $140 million BTC speeding ticket

But hell! The year 2022 and the crisis of confidence his companion passed by. The market is fragile. Bitcoin is falling. This collapse resulted in a huge loss for Tesla, which sold part of its assets to cover costs, in bitcoinbut also to TSLA stock. The company records according to a document provided to the SEC the total losses of $204 million in $64 million in revenue.

However, it is important to note that this loss only represents a small part of Tesla’s total balance sheet. The company continues to benefit from a solid financial performance thanks to its core activities in the automotive sector.

Furthermore, the company’s preference dElon Musk towards the king of cryptocurrencies doesn’t seem to have been harmed by the crypto winter. Quite the opposite. The company explained that it recognizes the value of its assets at a certain time, but that does not mean that these same assets will not have more value at a later time, and vice versa. In other words, these numbers are not required to be disclosed for a long time. In fact, Tesla’s report submitted to the SEC, dense with one hundred pages, can be summed up in this quote:

“As with any investment and consistent with how we manage fiduciary cash and cash equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on business needs and our vision. market and environmental conditions. Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Therefore, any decline in their fair values ​​below our carrying amounts for these assets at any time after their acquisition would require us to record impairment charges, whereas we would not be able to any upward change for any increase in market price to a sale. For any digital assets held now or in the future, these charges could adversely affect our profitability in periods in which such impairments occur, even if the overall market value of such assets increases . For example, in the year ended December 31, 2022, we recorded $204 million in impairment losses resulting from changes in the carrying value of our bitcoins and $64 million in gains on certain bitcoins to fiat currency to us.”

Tesla Annual Report – Source: Sec.gov

Although the loss of $140 million in bitcoin is large, it does not seem to have had a significant impact on the finances of You are here. The company took a risk by investing in Bitcoin. However, he still believes in cryptocurrency and sees a future where it can become widely accepted as Method of payment. Elon Musk confirm it appetite for cryptocurrency with regularity. If in McDonald’s or even to Twitterthe multi-billionaire puts the gum.

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