Tesla Bitcoin Holdings Valued At $1.99 Billion

Matthew Broersma,
Image credit: Tesla

Tesla’s Bitcoin holdings had fair market value of $1.99bn at end of 2021, as it loses $101m due to cryptocurrency’s ongoing volatility

The value of Bitcoin held by electric car company Tesla was $1.99 billion (£1.47bn) at the end of 2021, the company said in its annual filing with the US financial regulator on Monday.

Tesla, which said in February 2021 that it had made a $1.5bn aggregate investment in Bitcoin, noted that it made about $101m in impairment losses last year due to a drop in the cryptocurrency’s value.

It gained $128m after selling a portion of its holdings in March, the company said in the Securities and Exchange Commission filing.

IoT Data analytics bitcoin financeCryptocoin volatility

The value of Bitcoin rose and fell sharply last year, due in no small part to the influence of Tesla’s announcements around the digital currency.

Following its investment announcement in February, which caused a spike in Bitcoin’s value, Tesla said in March it would begin accepting Bitcoin as payment for Tesla vehicles.

But in May it reversed its position after critics highlighted the environmental concerns around the currency, which is “mined” using a highly energy-intensive process that often relies on fossil fuels.

The news saw Bitcoin’s value quickly plunge to its levels of before the February announcement.

The notoriously volatile cryptocurrency rose as high as $64,000 in the first half of 2021, then dropped to below $30,000 over the summer.

Controversy

It then hit another all-time high of $68,000 in November, doubling in value over the course of 2021, only to drop below $35,000 again by late January 2022.

Aside from Tesla’s influence, Bitcoin has also benefited over the past year from increasing adoption by mainstream financial institutions, with El Salvador adopting it as legal tender.

But last month the International Monetary Fund urged El Salvador to reconsider its decision, highlighting the risks to financial stability and integrity, as well as to consumer protection.

The World Bank and ratings agency Fitch had also warned against the move.

But officials in Miami and New York City have both backed Bitcoin initiatives as they seek to attract digital finance start-ups.