Tesla May Buy More Crypto Despite Headwinds
Recent tremors in the crypto market have not changed Tesla’s confidence in bitcoin. On the contrary.
The electric vehicle manufacturer still has the king of cryptocurrencies on its balance sheet. That stock is valued at $1.99 billion as of Dec. 31, CEO Elon Musk’s group said Monday.
Tesla had invested $1.5 billion in bitcoin in early February 2021. This significant investment considered one of bitcoin’s biggest brand endorsers had helped boost the crypto market as a whole. Many investors believe that if Tesla, symbol of the future of the car, made such a colossal bet, investing in digital currencies would be worth it.
While the Austin-based group says it made a $128 million gain selling some of its bitcoins in the first quarter of 2021, it ended the year with a $101 million bitcoin-related asset impairment. .
“As of December 31, 2021, the carrying value of our owned digital assets was $1.26 billion, reflecting accumulated impairments of $101 million. The fair market value of these owned digital assets as of December 31, 2021 was $1.26 billion. $1.99 billion,” the company said. noted.
Tesla could buy more crypto
Despite this loss, Tesla remains confident in bitcoin and cryptocurrencies in general. The group does not rule out, for example, the possibility of still buying digital currencies.
“We believe in the long-term potential of digital assets both as an investment and as a liquid alternative to cash,” the company said in its annual filing with the US Securities of Exchanges Commission (SEC). -United. “As with any investment and consistent with how we manage fiduciary cash and cash equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on business needs and our vision. market and environmental conditions.”
After a black month of January, cryptocurrency prices rebounded at the end of last week. They are now on an upward slope, led by bitcoin which was up 5.3% at $43,841.49 at the time of this writing. Even the dogecoin meme coin, the Tesla CEO’s favorite digital currency, rose 11.1%.
Musk is one of the great cryptocurrency champions and gurus. His pro-dogecoin tweets have often caused dogecoin prices to skyrocket. He even recently offered McDonald’s the chance to eat one of his burgers on TV if the fast-food giant would accept dogecoin as payment.
Tesla for its part had briefly accepted bitcoin as a means of buying its cars before doing an about-face last May for environmental reasons. But the electric vehicle maker recently accepted dogecoin for Tesla merchandise.
The bitcoin transaction validation process, known as proof-of-work, is power-intensive. Musk, however, has previously said that Tesla will start accepting bitcoin again once progress is made on it.