Tesla was not far behind and disclosed a $1.5 billion bitcoin purchase on February 8. The purchase of the cryptocurrency was made in a filing with the US Securities and Exchange Commission.
The purchase, Tesla said, was part of its updated investment portfolio, which was given a thumbs up by the company’s audit officers.
Since then, the value of bitcoin has dropped by more than half. As of June 30, the last day of Tesla’s second fiscal quarter, bitcoin was priced at $19,000. At the time of writing, bitcoin was trading at $19,735, down 0.5% from the previous week.
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Tesla Bitcoin Holdings Shedding Value Recently
Tesla’s investment in bitcoin has declined dramatically in recent months. In its Q2 financial report for 2022, Tesla’s BTC holdings were reduced by $440 million in the wake of the continuing bear market.
At the end of June, Tesla’s BTC investment fell to approximately $820 million as a result of the crypto’s fluctuating price.
Tesla estimated the value of his bitcoin at $1.26 billion three months ago. Despite the fact that the firm’s BTC coffers hold roughly $2 billion worth of crypto, the electric vehicle’s accounting practices mean it sees no profit until it is sold.
This indicates that the Austin, Texas-based carmaker will record a write-down of bitcoin holdings of around $440 million, or about 9% of its annual sales in 2021.
Bitcoin is losing its luster this year
Since the start of the current fiscal year, the performance of bitcoin has been pathetic. Other cryptocurrencies, such as Ether, Dogecoin, Litecoin, to name a few, have also been affected by the recurrent declines.
BTC total market cap at $381 billion on the daily chart | Source: TradingView.com
Bitcoin was trading for over $46,000 at the start of the year, but its value has dropped dramatically since then. Since reaching its all-time high in November last year, the price of bitcoin is down nearly 75%.
MicroStrategy and Block Inc. are among the companies that have converted a portion of their cash reserves into bitcoin.
On June 19, the price of bitcoin dropped significantly to $17,700, causing losses to many companies with bitcoin-based bets.
In barely half a year, more than $2 trillion has been wiped out from the total crypto market valuation because of a catastrophic crypto crisis that some sectors believe may just be heating up.
At the time of this writing, Tesla shares were trading at $679.80 per share in the extended session. The current price is about 0.30 percent lower than its previous close of $681.79.
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Featured image from Republic World, chart from TradingView.com
