Tesla, the bet on Bitcoin is very expensive: over 140 million dollars lost
Tesla, the bet on Bitcoin is very expensive: over 140 million dollars lost.
As of February 2021, Tesla had invested $1.5 billion in buying Bitcoin. The bet cost the company more than $140 million.
Tesla’s bet on Bitcoin cost the automaker dearly. Due to the cryptocurrency crash, Tesla lost over $140 million. Many of you certainly remember it: at the beginning of 2021, when the cryptocurrency was close to its maximum value, Tesla became one of the first large companies to decide to invest in Bitcoin.
The automaker decided, in fact, to invest 1.5 billion dollars in the cryptocurrency. In a recent SEC filing, Tesla reported that it lost $140 million on the investment.
Overall, Tesla reported that it lost $204 million on the Bitcoin gamble over the course of 2022. The automaker would still be able to recoup $64 million by converting some of its crypto reserves into fiat currency, thereby reducing its net loss.
We recall that initially Tesla had not limited itself to betting 1.5 billion dollars, but had also offered the possibility of buying its cars by paying in Bitcoin (only in the USA). Possibility that was quickly revoked, precisely because of the extreme volatility of the cryptocurrency.
In February 2021, when Tesla bought Bitcoin for $1.5 billion, the cryptocurrency was worth around $45,000. Two years later, today one Bitcoin is trading at $23,148. In hindsight, it is a miracle that the automaker managed to contain its losses, wisely deciding to convert a large part of its reserves into Bitcoin when the virtual currency had a higher value than it currently does.
At least initially it seemed that the bet could generate an important gain for Tesla, since the value of the cryptocurrency had undergone a significant surge in the days following the announcement of the purchase. In late February 2021, Tesla reported that he made more from Bitcoin than he made from selling cars.