Tesla posted a $204 million impairment loss on its bitcoin holdings in 2022, according to regulations registrations. The loss was offset by $64 million in profit from bitcoin trading, leaving the automaker with a net loss of $140 million.
Tesla had invested $1.5 billion in bitcoin in the first quarter of 2021 and stated that it believed in the longevity of the cryptocurrency. At the time, the company said bitcoin was a great place to store cash and still have instant access to it, while offering a better return on investment than more traditional central banks. In fact, after the initial purchase, Tesla promptly reduced its position by 10%, quickly making the automaker $101 million.
In March 2021, CEO Elon Musk said that Tesla would begin accepting bitcoin as payment for Tesla vehicles, causing the crypto’s price to skyrocket. A few weeks later, Musk and Tesla reversed that decision, citing concerns about the amount of energy needed to mine bitcoin. The price of bitcoin subsequently fell.
Last year, when bitcoin’s value started to fall, Tesla sold 75% of its bitcoin holdings and used the proceeds to buy traditional currencies. The automaker owns about $184 million in bitcoin today and may be waiting for an uptick.
The crypto market has experienced a dramatic downturn in the past year. Today, bitcoin is trading at $23,045.50, which is about 66% below its all-time high of $68,789.63. Despite losing more than half of its value, say some experts bitcoin has remained resilient and may experience a comeback, especially as buyers shy of the crypto market generally gravitate towards household names and more mature ecosystems, such as bitcoin or ether.
Tesla has shut down its press department and could not be reached for comment.