In Q3, Tesla suffered a $51 million loss on its Bitcoin holdings


The electric vehicle manufacturer Tesla has released its Q3 financial report, which shows a $51 million impairment loss on its Bitcoin holdings.

Tesla announced no new Bitcoin acquisitions or sales in its Q3 results presentation, and the company now has $1.26 billion in Bitcoin assets.

If the price of a digital asset falls throughout a quarter, a firm is required to record an impairment, according to accounting standards for digital assets. Even if the price rises, the increase is not recorded on the balance sheet as a profit.

Tesla had a $51 million impairment loss on its Bitcoin assets in the third quarter of 2021, from July 1 to September 30. Even though the price of Bitcoin increased by about 30% to $43,000 in the third quarter, the business blamed the loss on a fall in the value of the token, particularly during a period when the flagship cryptocurrency plummeted to $29,000 in July and as low as $40,000 in September.

According to the accountant’s statement, Tesla’s Bitcoin holdings fell by $51 million to $1.26 billion in the July-September period, down from $1.31 billion in the second quarter.

Tesla’s Crypto Gamble Pays Off

On the other hand, Tesla can no longer be claimed to be harmed by its Bitcoin holdings.

When you examine the real gains that Bitcoin has achieved from January to now, Tesla’s cryptocurrency investment has been a great one.

In February, the business acquired $1.5 billion worth of Bitcoin as part of its balance sheet when the top cryptocurrency was selling at approximately $34,000.

Tesla claimed in a Q1 statement with the Securities and Exchange Commission that the value of its Bitcoin investments was $2.48 billion on March 31.

The price of Bitcoin was $59,000 at the time, and the business stated that it had 42,000 Bitcoins on hand.

It’s also worth noting that Tesla earns more money by selling Bitcoins.

In late April, Tesla’s CEO, Elon Musk, revealed that it had sold 10% of its Bitcoin holdings to demonstrate that it is a viable alternative to cash. Musk was replying to Barstool Sports founder Dave Portnoy’s inquiry on whether Tesla had benefitted from a Bitcoin pump-and-dump scam, which encourages investors to raise the price of an asset by making exaggerated statements.

According to the current pricing, one Bitcoin was trading at about $63,019 this week, which implies Tesla has more than $2.67 billion in Bitcoin, a gain of more than a billion dollars from Q1.

On the other hand, Tesla is unable to increase the value of its bitcoin due to peculiar accounting regulations. As a result, any profits may only be recognized if the digital asset is sold.


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