Tesla’s Bitcoin bet turns into a nightmare

Tesla’s Bitcoin bet turns into a nightmare

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The electric vehicle manufacturer had invested $1.5 billion in Bitcoin in 2021

The list of victims of the Bitcoin and cryptocurrency crash continues to grow every day. Tesla  (TSLA) – the manufacturer of electric vehicles is now part of it. 

Elon Musk’s company had invested $1.5 billion in Bitcoin on February 8, 2021. This investment lost a lot of value as cryptocurrency prices plummeted. Bitcoin has fallen and is currently trading at its lowest level since December 2020.

Bitcoin is at $20,148.99, compared to the $69,044.77 reached last November. In eight months, Bitcoin has lost 67.5% of its value.

This fall caused important losses to Tesla. 

Tesla CEO – Elon Musk

The value of the 43,200 bitcoins that the group has on its balance sheet is now only $968.103 million, according to Bitcoin Treasuries. Tesla has already lost around $530 million. Therefore, it would make sense for the vehicle maker to announce a  depreciation charge related to this digital asset at least when announcing its second-quarter results in July.

Tesla claimed that its investment in Bitcoin was aimed at diversifying its sources of liquidity and gaining flexibility.

Billionaire Saylor’s MicroStrategy Lost over $1 Billion

For several months, the gamble paid off, especially when the price hit an all-time high of $69,044.77 on Nov. 10. But now it’s the flip side.

Besides Tesla, billionaire Michael Saylor’s software company MicroStrategy  (MSTR) – has also seen its Bitcoin investment lose a lot of value.

The company has 129,218 bitcoins on its balance sheet, purchased at a value of $3.97 billion. But that value has melted down to $2.895 billion. Basically MicroStrategy lost over a billion dollars.

Finally, the other big name to have invested in Bitcoin is Block  (SQ) – Jack Dorsey’s fintech, formerly known as Square. The firm holds 8,027 bitcoins purchased at $220 million. They are now only worth $179.883 million, according to Bitcoin Treasuries.

Block lost nearly $40 million.

Source: TheStreet

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