Written by 4:45 am Bitcoin

Tesla’s Bitcoin Bet: Was It Worth It?

The business magnate Elon Musk has always been a fan of Bitcoin. Tesla had already purchased $1.5 billion in Bitcoin and accepted it as payment. In the past, the values of BTC and even Dogecoin have risen as a result of his tweets about the crypto market.

However later he converted about 75 percent of his Bitcoin holding into fiat currency. Tesla had invested about $1.5 billion in Bitcoin but subsequently sold 10 percent of its stake.

There’s a new update on Musk and his holdings, let’s see what it is. 

What does the Tesla earnings report reveal? 

Tesla reported $184 million in “digital assets” at the end of the year, down from $218 million recorded for the third quarter in its earnings report for the fourth quarter of 2022. According to the report, Tesla did not sell or buy any digital assets during the quarter. Tesla does not list the digital assets it has on its balance sheet, but it is assumed that BTC makes up the vast majority, if not all, of the $184 million. However, Elon Musk has previously stated that the company also has dogecoin (DOGE), though the actual amount is unknown.

Tesla is estimated to have 9,720 BTC on its balance sheet. 

Tesla suffers impairment losses

Simultaneously, Tesla reported $34 million in impairment costs as a consequence of the cryptocurrency’s dropping price. A long-term asset’s or inventory’s estimated permanent drop in value is referred to as an “impairment loss” in accounting. It is commonly estimated as the difference between the carrying value of an asset and its fair market value at a certain moment in time.

This unexpected development brought Tesla’s investment plans into better perspective, and investors are now attempting to decipher Tesla’s motives for acquiring this volatile cryptocurrency. A lot of people thought it was smart to diversify its holdings, but other people also thought it was a risky gamble. Despite numerous optimistic expectations, Tesla’s venture into cryptocurrencies did not lead to an increase in bitcoin usage. 

Despite market volatility, Tesla has maintained its cryptocurrency holdings. Musk has continued to retain it, which suggests that he may have some future plans in mind.

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