On the heels of a steady fall in the price of Bitcoin over the last few months, Tesla’s Bitcoin holding has reportedly had a value drop of 33%.
Bitcoin (BTC), the world’s largest cryptocurrency, has failed to keep up with its recovery and is currently selling info of $19,000. Elon Musk’s Tesla Inc (NASDAQ: TSLA) is facing a $440 million write-down on its Bitcoin assets following this year’s dramatic price drop.
Tesla placed $1.5 billion outsider reserve funds in BTC last year, in February 2021. This caused a market euphoria, with the coin topping at $69,000 in November 2021. Although Tesla sold some of its BTC last year, it still holds the majority.
Tesla is facing $440 million in impairment losses since the price of BTC has dropped more than 70% since the beginning of the year. The company’s Bitcoin investments are currently valued at $820 million. Three months ago, the business valued its Bitcoin investments at $1.2 billion. This indicates that the company’s BTC holdings have declined by 33% in just three months.
Aside from its investment, Tesla has also begun taking BTC payments for a limited time. It eventually reversed its judgment, citing environmental issues with Bitcoin mining.
Tesla is not the only company that has invested a portion of its cash reserves in BTC. This strategy has been used by other companies such as MicroStrategy, Coinbase, and Block Inc. MicroStrategy, a business analytics firm, added to its holdings last week with a Bitcoin acquisition.
As previously said, BTC remains under pressure near $19,100. According to market analyst Ali Martinez:
If BTC manages to maintain a sustained closing above $19,600, we should expect further bullish market activity up to $22,000. It’ll be intriguing to see what the market has in store for the coming week.