EV giant Tesla, which has been a big proponent of cryptocurrencies courtesy CEO Elon Musk, has revealed a recorded loss of over $200 million in the world’s largest cryptocurrency, Bitcoin.
According to regulatory filings filed with the US Securities and Exchange Commission last month, the electric car manufacturer recorded a gross impairment loss of $204 million on it’s Bitcoin holdings last year. While the company continues to have a sizable amount of the cryptocurrency, the amount is lesser than it used to be – since Tesla sold a lot of them – and incurred this major loss last year.
The impairment loss is offset somewhat by a gain of $64 million in profits from Bitcoin trading. However, this still leaves the US-headquartered automaker with a net loss of $140 million. The gain of $64 million came from the conversion of some of its Bitcoin holdings into “fiat currency,” Tesla noted in its filings.
Tesla’s shares clocked a drop of 1.8% in premarket trading to $163.67, before rising again to $173.22. The company said that even if the market price of its crypto holdings moved in a positive direction, the charges may “negatively impact our profitability.”
Tesla’s disclosure to the SEC comes less than a week after the company disclosed its quarterly earnings for the previous quarter. While the earnings report did not include any Bitcoin transactions, it recorded the decline of the value of its holdings, along with a loss of $43 million for the last four months of the previous year.
The relationship between Tesla and cryptocurrencies is nothing new, and the automaker has already made hefty investments in the crypto sector.
During the first quarter of 2021, it invested $1.5 billion in Bitcoin, claiming that the cryptocurrency was a good place to store easily-accessible cash and something that provides better returns on investment than more traditional central banks. The same year, Tesla CEO Elon Musk announced that Tesla would be accepting Bitcoin as payments for Tesla vehicles, in the US, only to backtrack a few months later.