The electric vehicle maker made a $64 million profit from bitcoin trading, offset by a $204 million decline.
Electric vehicle manufacturer Tesla has disclosed that it will have a gross loss of $204 million in its bitcoin in 2022, according to a Jan. 31 filing with the United States Securities and Exchange Commission
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Holdings. At the same time, Tesla made a profit of $64 million by converting BTC into fiat currencies at various points during the year, resulting in a net loss of $140 million from its cryptocurrency trading activities
The filing also explained the impact of volatile crypto prices on Tesla’s bottom line.
“Digital assets are considered indefinite-lived intangible assets under applicable accounting rules. Accordingly, we will need to recognize impairment charges for such assets at any time after their acquisition for any decrease in their fair value below our carrying values, while we will require anything above for any market value increase until sale unless you can change sides. These charges for any digital assets held now or in the future could negatively impact our profitability during periods in which such impairments occur even if the overall market value of these assets increases.”
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In the first quarter of 2021, Tesla invested $1.5 billion in Bitcoin. At the time, its founder Elon Musk announced that the electric vehicle maker would begin accepting BTC payments from U.S. consumers.
The policy was reinstated just a few months later, as Musk noted “positive future trends with confirmation of reasonable (~50%) clean energy use for [bitcoin] miners” before adopting the company’s repayment tool referred to the Tesla by 2022 It reportedly sold 75% of its BTC holdings in the second quarter of the year.
