Due to the Bitcoin crash, Elon Musk’s Tesla suffered a loss of $440 million. Tesla purchased $1.5 billion worth bitcoin in the early part of last year. This made it the largest company that converted some of its cash reserves to cryptocurrencies.
Bitcoin is now worth less that $20,000. It has fallen to an 18-month low in the last few months. The company’s bitcoin assets today are worth $820.8 million, an increase of $1.26 billion from three months ago.
This means that Tesla will likely record an impairment of approximately $440 million in its bitcoin holdings. That is equivalent to 9% off its full-year profits.
The cryptocurrency price is now down 60% from $46,700 at its beginning of the year, and almost 75% from its peak in November. Inflation and rising interest rates have slowed interest in digital assets. Prices have been affected by a string of crises in crypto-related companies.
Tesla briefly used bitcoin last year as a method of payment, but it was stopped by Musk who raised concerns about the carbon footprint. The richest man in the universe stated earlier this year that he didn’t sell any of his cryptocurrency holdings.