Tesla (TSLA) Reports Almost $2B Worth of Bitcoin Holdings in 2021

Tesla (TSLA) Reports Almost $2B Worth of Bitcoin Holdings in 2021

It incurred $101 million in impairment charges as a result of volatile cryptocurrency prices.

Tesla, Inc. (TSLA) reported in an SEC filing on Monday, Feb. 7, that it had nearly $2 billion in Bitcoin (BTCUSD) on its balance sheet at the end of 2021. 1 That figure represents a healthy 33 percent increase over the $1.5 billion it spent earlier that year to acquire the asset. Tesla's Bitcoin holdings had a carrying value of $1.26 billion at the end of 2021, and their market value was $1.99 billion.

Bullish on Bitcoin

Tesla is one of the few publicly traded companies that has Bitcoin on its books. Elon Musk, the company's CEO, has long been bullish on Bitcoin, an asset whose price reached new highs during the pandemic. 2 Bitcoin is also accepted for purchases of certain products on the company's website.
As Bitcoin's price skyrocketed, reaching nearly $68,000 in April 2021, Tesla sold some of its Bitcoin stash for $272 million, earning a profit of $128 million on the transaction. Following a drop in cryptocurrency prices, the company was forced to record impairment charges—losses in the value of its holdings—in successive quarters. During the third and second quarters of 2021, it recorded impairment charges of $51 million and $23 million, respectively.

34 According to the most recent filing, Tesla had total impairment charges of $101 million related to Bitcoin in 2021.
This year, the company may have to report additional losses. In 2022, the crypto market's trajectory has shifted. Bitcoin's price has dropped nearly 50% from its highs last year as investors rebalanced their portfolios to eliminate risky assets in anticipation of an increase in interest rates.
Tesla, on the other hand, is not backing down from its Bitcoin wager. "We believe in the long-term potential of digital assets as both an investment and a liquid alternative to cash," the company said in its filing.

It also stated that its holdings of digital assets would be increased or decreased based on its assessment of "market and environmental conditions."
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