Saturday, December 9, 2023

Tesla records $170 mn impairment loss despite “selling Bitcoin for profit”.

The crypto market downturn has also had an impact on Tesla, which recorded a $170 million impairment loss. The EV manufacturer spent $1.5 billion for 43,200 Bitcoin in the first quarter of 2021 and sold off 10% of its for $272 million in the same quarter.

Last week, Tesla reportedly sold 75% of its Bitcoin for $936 million. The company in an SEC filing stated that as with any investment and consistent with how Tesla manages fiat-based cash and cash-equivalent accounts, it may increase or decrease its holdings of digital assets. This is based on the needs of the business and its view of the market and environmental conditions.

Zach Kirkhorn, Tesla’s CFO, had earlier said that the company’s Bitcoin investment was long-term and the sales were just an experiment to demonstrate Bitcoin’s liquidity and utility as an alternative reserve asset. The EV maker can acknowledge any gains made from the sale of digital assets. It posted a $64 million gain on certain conversions of Bitcoin into fiat currency in the six-month period ending June 30. According to Arcane Research, Tesla sold 29,060 Bitcoin at an average price of $32,209. The company is left with 9,700 Bitcoin worth about $205.1 million on its balance sheet.

Marcus Sotiriou, an analyst at GlobalBlock, says Tesla’s recent Bitcoin sale shows that the company was forced to manage risk and raise cash in a rising interest-rate environment. But Tesla still holds the second-largest Bitcoin stash of any public company. Musk had last week said that the company is open to buying Bitcoin in the future. He explained that Tesla was just concerned about the overall liquidity.

Cryptured Team
Cryptured Team
The writers team at is composed of passionate and experienced journalists who cover the latest developments in the crypto and blockchain space. They aim to provide accurate, unbiased and easy-to-understand news and information for their readers, as well as insights and analysis from industry experts. The writers team is always on the lookout for new and exciting stories that can help the general public learn more about the potential and challenges of these technologies.

Most Popular