Tesla filed a report with the SEC on Monday. The electric car maker has taken a huge financial hit due to the volatility of Bitcoin. The report states that Tesla recorded a total net loss of $140 million for its Bitcoin holdings in 2022.
A net loss of $140 million in Bitcoin (BTC)
In the fiscal year ended Dec. 31, 2022, Tesla recorded impairments of $204 million for its own Bitcoin assets. At the same time, she made a profit of $64 million by converting her BTC into fiat currency. Tesla therefore recorded a total net loss of $140 million. Note that an impairment charge is a reduction or loss in value of an asset. It can be triggered due to a change in economic circumstances.
Tesla filed its report with the DRY barely a week after its quarterly earnings report. This did not include Bitcoin transactions but nevertheless recorded a decrease in its holdings. This generated a loss of $43 million for the last four months of 2022.
Tesla, impacted by impairment charges
As a reminder, Tesla invested an astronomical sum of $1.5 billion in Bitcoin in February 2021. At the time, BTC was trading at $46,364 then it reached its all-time high of $69,044, the November 10, 2021. It didn’t last as Bitcoin and the rest of the crypto market crashed in 2022. Since 2021, Tesla’s value losses have nearly doubled.
It reported a $101 million impairment on digital assets and a $128 million gain after selling BTC in 2021. Although the company sold 75% of its holdings in July 2022, it still held $218 million in Bitcoin in October. Tesla said that for any digital asset owned, impairment charges can negatively impact the company’s profitability even if overall asset values increase.
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