Tesla’s fourth-quarter financial statement released last week showed that the company did not buy or sell any Bitcoin for the second quarter in a row. However, the SEC filing dated January 31 reports $140 million in losses.
Tesla lost $140 million from Bitcoin investments
The electric vehicle manufacturer recorded a loss of $140 million in Bitcoin investments in 2022. According to a filing with the SEC on Jan. 31, Tesla announced that it recorded a gross impairment loss of $204 million on its Bitcoin in 2022.
Simultaneously, Tesla recorded $64 million gains from converting BTC to fiat currency at various points throughout the year, drawing its losses on crypto investments to $140 million.
The filing explains the impact of volatile crypto prices on Tesla’s profitability:
Cryptocurrencies are considered intangible assets with an indefinite life under applicable accounting rules. Accordingly, any decrease in the fair value of our book values for such assets at any time after acquisition will require us to recognize impairment charges, whereas we may not be able to revise upwards for any market price increase until a sale. For any cryptocurrencies held now or in the future, these fees can negatively impact our profitability during periods of such impairment, even if the overall market value of these assets rises.
How many Bitcoins did Tesla sell?
In the first quarter of 2021, Tesla invested $1.5 billion in Bitcoin. At the time, founder Elon Musk had announced that the electric vehicle manufacturer would begin accepting BTC payments from US-based consumers.
The policy was withdrawn only months later, as Musk stated that “reasonable (~50%) clean energy use by Bitcoin miners should be justified by a positive future trend” before the company would re-accept the payment method. Tesla reportedly sold 75% of its BTC holdings in the second quarter of 2022.
When can Tesla sell BTC?
An important level to watch out for is $32,099. Tesla bought 9,720 Bitcoins at this price on average. If the company is to potentially make a sale, it will most likely target this level or higher.
As quoted by Kriptokoin.com, its 4th Quarter results report on January 25 shows that Tesla neither bought nor sold any of its Bitcoins for the second quarter in a row. This trend occurred despite the intense market turmoil in November and December following the collapse of FTX. The documents show that the company has $184 million in cryptocurrencies as of December 31. Some of them are Dogecoin (DOGE), which the company accepts as payment.
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