Tesla Was Holding Bitcoin Worth Almost $2B by End of 2021

UTC by Mercy Tukiya Mutanya · 2 min read
Tesla Was Holding Bitcoin Worth Almost $2B by End of 2021
Photo: Depositphotos

Following the company’s announcement in February last year that it had purchased $1.5 billion worth of Bitcoin, the cryptocurrency’s price shot 20%.

Electric vehicle company Tesla Inc (NASDAQ: TSLA)revealed on Monday that it had almost $2 billion worth of Bitcoin in its holdings at the end of 2021. In its Securities Exchange Commission (SEC) filing documentation, the firm explained that it had acquired and received Bitcoin worth $1.5 billion last year. By the last day of the year, Tesla’s Bitcoin holdings were worth $1.99 billion. The EV company recorded impairment losses of $101 million. Gains realised after selling off a portion of its holdings in March amounted to $128 million. Taking into account this gain and the $101 million impairment loss, the company’s overall crypto gain for the year was $27 million.
The document read in part:

“As of December 31, 2021, the carrying value of our digital assets held was $1.26 billion, which reflects cumulative impairments of $101 million. The fair market value of such digital assets held as of December 31, 2021 was $1.99 billion.”

Because the firm does not account for the cryptocurrency as a mark-to-market asset, the wild fluctuations the top crypto experienced in 2021 do not affect the value of Tesla’s Bitcoin holdings. This only holds true as long as the firm does not buy or sell.

Tesla’s Hot and Cold Relationship with Crypto

Following the announcement by Tesla in February 2021 that the company had purchased $1.5 billion worth of Bitcoin, the cryptocurrency’s price shot 20% to as high as $46,000. In addition to purchasing Bitcoin, the company announced that it would start accepting the cryptocurrency as a mode of payment “subject to applicable laws and initially on a limited basis”.

Shortly thereafter, company CEO Elon Musk announced that the company would no longer be accepting Bitcoin payments citing environmental concerns. Musk however clarified that the company would not sell any of its Bitcoin holdings. He explained that the company would hold on to the crypto and use it in future transactions when Bitcoin mining adopted the use of more sustainable energy. The company then went on to look into other coins “that use <1% of Bitcoin’s energy/transaction.”

Last month, after much speculation by the online crypto community, Musk revealed Tesla merchandise was now “buyable with Dogecoin”. The merch one can purchase with Doge includes Tesla-branded belt buckles, whistles and children’s all-terrain vehicles.

Bitcoin News, Business News, Cryptocurrency news, Investors News, News
Mercy Tukiya Mutanya

Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student. She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.

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