According to its filing with the US Securities and Exchange Commission (SEC), Tesla, an electric car manufacturer, registered a $135 million impairment charge stemming from its Bitcoin holdings. Tesla only gained $64 million from BTC sales in 2022.
In the financial market, an impairment charge represents a loss or decrease in the value of a certain asset. Mostly it occurs due to changes in the economic environment, for example, the crypto winter that hit the market following Terra Luna’s collapse.
The yearly disclosure to the Securities and Exchange Commission comes a few days after the electric car maker announced its quarterly earning report. The report did not include any BTC transactions, but its holdings’ value still had reduced by $34 million.
Tesla’s BTC Investment Journey
Tesla invested over $1.4 billion in BTC in early 2021. As a result, the automaker became one of the biggest corporate holders of the popular digital asset. At that time, BTC traded at $46,245, and by November of that year, it had reached its peak price of $69.021.
However, the good times never lasted as BTC, and the entire crypto market went crumbling down in 2022. Several factors, including the collapses of big crypto firms and Fed rate hikes, fueled the market crash.
The recent impairment charge figure means that it is higher than that recorded in 2021. Tesla’s filing that year shows it registered an impairment loss on BTC worth $102 million and gained $120 million from selling BTC in 2021.
In Tuesday’s filing, Tesla wrote that it might decrease or increase its holdings of cryptocurrencies at any moment based on the company’s needs, its view of the market, and the general environmental conditions.
Tesla described its Bitcoin holdings as ‘indefinite-lived intangible assets’ regularly reviewed to compare their fair market value and their value on the balance sheet. That said, the impairment charges could affect the firm’s future investment in BTC.
Is Tesla Holding Dogecoin?
Tesla did not mention any other crypto in the Securities and Exchange Commission filing or the quarterly earning report. However, the automaker is believed to hold some Dogecoin, considering that it accepts the coin as payment.
