Bitcoin: Tesla Will Lose $140 Million in BTC in 2022, Elon Musk
Betting on Bitcoin – Here it is The strategy chosen by Tesla for several years now. And society in this ice ageElon MuskA strong supporter of DogeCoin, it recorded a net loss 140 million dollars in bitcoin investments (BTC). This is like a significant loss the price drop of the king of cryptocurrencies, but does not have a significant impact on the company’s finances, which benefit from a strong balance sheet. Fasten our seat belts: explanations.
Tesla and the ready strategy: bitcoin investment
Let’s not go at high speed and start from the beginning. you are here is known by a bold and innovative approach in terms of investment. In January 2022, the company even announced that it would invest 1.5 billion dollars in bitcoins. Cryptocurrency payments were once on the agenda Elon Musk’s electric cars.
However, proof against bitcoin also affects institutions, Tesla saw investing in BTC as a way to diversify and increase long-term profits.
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$140 million BTC speeding ticket
But hell! 2022 and crisis of confidence his escort passed by. The market is fragile. Bitcoin is falling. That fall resulted in a significant loss for Tesla, which later sold some of its assets to cover costs. bitcoinalso in TSLA shares. The company records total losses, according to a filing with the SEC 204 million dollars for $64 million profit.
However, it should be noted that this loss is only a A small portion of Tesla’s total balance sheet. The company continues to benefit from strong financial performance thanks to its core activities in the automotive sector.
In addition, the company’s wishes dElon Musk towards the king of cryptocurrencies, crypto is not affected by the winter. Quite the opposite. The company explains that it recognizes the value of its assets at a certain point in time, but that doesn’t mean those assets won’t have more value later, and vice versa. In other words, these numbers are not necessarily revealed in the long run. In fact, Tesla’s dense one-hundred-page filing with the SEC can be summed up with this quote:
“As with any investment and consistent with how we manage fiduciary cash and cash equivalent accounts, we may increase or decrease our digital assets at any time based on business needs and our vision, market and environmental conditions. Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Therefore, any decrease in the fair value of these assets below our carrying amount at any time after their acquisition would require us to record an impairment charge, whereas we cannot make an upward adjustment for any increase in market price. sale. These fees for any digital assets held now or in the future could adversely affect our profitability during periods in which such impairments occur, even if the aggregate market value of such assets increases. For example, during the year ended December 31, 2022, we recorded an impairment loss of $204 million and a gain of $64 million from certain bitcoin to fiat currency due to changes in the carrying value of our bitcoins.
Tesla Annual Report – Source: Sec.gov
though it is a loss 140 million dollars is significant in bitcoin, it does not seem to have a significant impact on finance you are here. The company took a risk by investing in Bitcoin. However, he still believes in cryptocurrency and sees a future where it can be widely adopted means of payment. Elon Musk confirm this appetite for cryptocurrency regularly. Whether McDonald’s or even Twittermultibillionaire puts gum.
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