The electric car maker made $ 64 million on bitcoin trading, offset by a drop of $ 204 million.

Electric vehicle maker Tesla recorded a total loss of $ 204 million on its bitcoins during 2022, according to a filing with the Securities and Exchange Commission on Jan. 31.

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$ 22,391

Assets Meanwhile, Tesla recorded a profit of $ 64 million from the conversion of Bitcoin into fiat currency at different times during the year, resulting in a net loss of $ 140 million from its cryptocurrency trading activities.

This document further explains the impact of volatile cryptocurrency prices on Tesla’s bottom line:

Under applicable accounting law, digital assets are considered intangible assets with indefinite useful lives. Hence, any drop in their equity price below our book value for these assets at any time after our acquisition will require us to acknowledge the impairment charge. Upgrades are possible until the sale. Does not increase market value. “For any digital asset held now or in the future, these fees could seriously affect our profitability during such a downturn, despite the overall market value of such assets. Even more. ”
Related: Elon Musk reveals when Tesla will start accepting Bitcoin payments

In the first quarter of 2021, Tesla invested $ 1.5 billion in Bitcoin. At the time, founder Elon Musk announced that electric car makers would begin accepting bitcoin payments from US-based consumers.

The policy was withdrawn months later as Musk raised the need to “verify proper clean energy use (about 50 percent) by [Bitcoin] miners with a positive future outlook” before reinstating the payment instrument. . Tesla reportedly sold 75% of its Bitcoin holdings in the second quarter of 2022.

Source: CoinTelegraph