Tesla Held $1.99B Worth Bitcoin at the End of 2021

Tesla Held $1.99B Worth Bitcoin at the End of 2021

By Marielle Petere

Tesla Inc. (TSLA) submitted an annual report to the Securities and Exchange Commission. On Monday, it showed that the company held about $2 billion in bitcoin at the end of 2021.

“The fair market value of our bitcoin holdings as of December 31, 2021, was $1.99 billion,” the electric car maker stated.

Tesla and its bitcoin investment

In early February last year, Tesla confirmed that it bought a total of $1.5 billion in bitcoin. The electric car maker also accepted bitcoin as payment for cars in a short period, yet withdrew its decision in May due to environmental criticism.

“Because of the rapidly increasing use of fossil fuels for bitcoin mining,” Tesla CEO Elon Musk tweeted on May 12, 2021. He even added the company looked into cryptocurrency that used less energy.

After what happened, many people were puzzled because of Tesla’s abrupt cancellation of its decision for bitcoin as a payment option. Several Bitcoin investors were not delighted with Musk’s tweet.

But then, Tesla has never withdrawn its bitcoin investment. It even extended its support to another meme coin, Dogecoin, as Musk announced on Twitter that the company allowed customers to purchase its merchandise using DOGE in January this year.

$101M impairment loss in 2021

On the other hand, the company disclosed its impairment loss in 2021 worth $101 million from its bitcoin investment. Bitcoin had ups and downs last year with other digital currencies.

In July 2021, the price of the largest cryptocurrency by market cap dropped to $30,000. It happened when China implemented the crypto mining clampdown and a blanket ban against digital currencies.

Bitcoin and other virtual currencies had shown resilience as the global cryptocurrency market cap hit $3 trillion as of November last year. Bitcoin rallied to an all-time high and reached above $68,000.

Speaking of bitcoin loss, the company does not account for the cryptocurrency as a “mark-to-market asset”. Bitcoin could only affect when the electric car maker buys and sells.

CNBC reported that the drop in its value should not affect earnings as long as Tesla has not divested its holdings.

 

Editor’s Note:

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Original Source: https://bit-xchange.co/tesla-held-1-99b-worth-bitcoin-at-the-end-of-2021/

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