Tesla reported a loss on its investment in BTC, although, given the recent changes in the asset’s value, the nominal return on investment in Bitcoin was $1,3 billion.

Tesla faces loss on Bitcoin investment 

Tesla released Q3 2021 financial statements. The cryptocurrency assets showed a $51 million impairment amid a fall in the market value of BTC. On the whole, the company’s income increased by 57% compared to the previous period. Compared to the same period of the past year, the net profit amounted to 389,4%. Such an indicator is due to cost optimization and record car sales.

Elon Musk decided to invest in Bitcoin $1,5 billion in February. On average, 1 BTC cost the company $35,000. In April, Tesla sold about 10% of the acquired cryptocurrency, earning $101 million on the deal. Tesla reported bitcoin-related impairments of $23 million in Q2. Such losses are recorded as “restructuring and other” among operating expenses.  

“Losses” are a consequence of how digital assets are accounted for in the U.S. If assets are depreciated, it is recorded as a loss, but asset price appreciation is not counted as a gain. According to Bitcoin Treasuries, Tesla still has 43,200 BTC in its account. Given recent Bitcoin exchange rate changes, the company would profit more than $1,3 billion if it sold the asset.

Author: Mark Wallerstein