Tesla‘s bitcoin holdings had grown to almost $2 billion by the end of December, as stated on Monday. This confirms that the company led by billionaire Elon Musk did not sell a single bitcoin in the second half of this year. Tesla now ranks second in the U.S. for the number of bitcoins it owns.
Disclosed bitcoin holdings
After its $1.5 billion investment in the first quarter, Tesla disclosed its bitcoin holdings had skyrocketed to $1.99 billion as of Dec. 31, as per Forbes. This represents about 10% of Tesla’s liquid assets, which include cash and marketable securities.
According to Bitcoin Treasuries, Tesla holds around 43,200 bitcoins, which is more than eight of the top ten corporate holders of the world’s largest cryptocurrency. Tesla briefly accepted bitcoin as a form of payment before discontinuing the practice in May due to environmental concerns.
Many in the Tesla community were concerned when Tesla originally disclosed its Bitcoin investment, and many were enraged that the corporation hadn’t considered it.
Not a market-to-market asset
Tesla stated at the time that they were not selling their Bitcoin investment and planned to resume accepting payments once the network had a higher renewable energy mix. Meanwhile, according to CNBC News, Tesla does not treat bitcoin as a mark-to-market asset, which means that it only has an impact on earnings when the company buys or sells the cryptocurrency.
As a result, the decline in the value of bitcoin should have no impact on Tesla’s profitability as long as the company does not sell any of its bitcoin assets. Tesla recognized $101 million in impairment losses on its bitcoin investment in 2021, citing a decline in the value of the cryptocurrency in a filing with the Securities and Exchange Commission.
Tesla also stated that it realized gains of $128 million as a result of the sale of a portion of its interests in March of last year. Over the course of the year, Tesla made a total of $27 million in cryptocurrency transactions, which was recorded as a negative loss in restructuring and other charges.