Elon Musk and Tesla maintain their stake in Bitcoin

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The news will undoubtedly delight fans of cryptocurrency and bitcoin.

During the fourth quarter, Tesla and Elon Musk kept the bitcoins they had left as of September 30 on the electric vehicle leader’s balance sheet.

In early 2021, the group gave a much-needed vote of confidence to the young industry powered by blockchain technology, which wants to disrupt the traditional financial system.

Musk said in February of the same year that Tesla (TSLA) – Get Free Report had invested $1.5 billion in bitcoin. He bought over 43,200 bitcoins for around $30,000.

The gamble quickly paid off as the price of bitcoin hit an all-time high of $69,044.77 on November 10, 2021, amid the crypto craze. But the collapse of the crypto market has shaken most players, even its evangelists. The crypto lost nearly $2 trillion after hitting an all-time high of $3 trillion.

Bitcoin has lost two-thirds — almost 67% — of its value, trading around $23,000 when last checked, according to data firm CoinGecko.

Tesla had managed to limit the damage by selling off much of its bitcoin stake before prices fell below its purchase price. Tesla said last July that it had sold 75% of the 42,000 bitcoins it held on April 1.

Tesla’s bitcoin value fell to $184 million

“We converted about 75% of our bitcoin purchases into fiat currency,” the Model Y and Model 3 maker said at the time.

It “recognized $170 million in impairments resulting from changes in the book value of our bitcoin.” The company recorded a net loss of $106 million on its bitcoin bet.

The bitcoins remaining on its balance sheet were valued at $218 million. At the end of September, the value of these bitcoins had not moved because the prices of the most popular cryptocurrency had not changed much in the third quarter of 2022. Bitcoin prices remained almost stable (-0.7%) between June 30 and September 30.

However, this was not the case in the fourth quarter. Bitcoin prices were down 15% in the quarter to year-end.

Digital currency fans would be happy to hear that Tesla and Musk didn’t sell their bitcoins during this tough time. But on the other hand, the value of their bitcoins has fallen sharply, according to financial documents the company released on January 25 as part of its fourth quarter results.

Tesla says the value of its bitcoins fell from $218 million as of September 30 to $184 million as of December 31, an asset write-down of around $34 million, or 16%.

No surprise here: Tesla in November warned in a regulatory document that the prices and total value of these digital assets would fluctuate.

“Digital asset prices have historically been and may continue to be highly volatile, including due to various associated risks and uncertainties,” the company said in the regulatory filing.

“For example, the prevalence of these assets is a relatively recent trend, and their long-term adoption by investors, consumers, and businesses is unpredictable.”

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