Tesla suffered $34m loss from its Bitcoin
Tesla has taken a $34m (£27m) loss from its Bitcoin holdings after the cryptocurrency market was plunged into chaos at the end of last year.
Elon Musk’s electric car company opted not to buy or sell any Bitcoin in the fourth quarter, keeping its position steady.
However, Tesla’s latest figures showed the value of its “digital assets” dropped to $184m from $218m at the end of the previous quarter.
The decline mirrored falls in Bitcoin over the final three months of the year as digital currencies took a beating following the dramatic collapse of crypto firm FTX and the arrest of its founder Sam Bankman-Fried.
Mr Bankman-Fried, once hailed as a saviour of crypto, is facing trial on charges of embezzling billions of dollars from investors in one of America’s biggest ever fraud trials.
Mr Musk, who bought social media firm Twitter for $44bn in a troubled takeover in October, was once a vocal proponent of cryptocurrencies and bet heavily on the assets, investing $1.5bn of Tesla’s money in Bitcoin.
But the company last year revealed it had sold off three-quarters of its Bitcoin holdings, boosting its balance sheet by almost $1bn.
The Tesla billionaire initially planned to allow customers to buy Tesla vehicles using Bitcoin, before backtracking citing the environmental damage caused by mining the coins.
The value of Bitcoin has fallen precipitously over the last six months amid what has been dubbed a “crypto winter”.
Announcing the exit from Bitcoin, Mr Musk said the decision was made due to uncertainty over the impact of Covid lockdowns in China and insisted it “should not be taken as some verdict on Bitcoin”.
He added that Tesla was open to increasing its cryptocurrency holdings in future.
As well as his support for the world’s largest digital coin, Mr Musk has also tweeted enthusiastically about other digital assets such as Dogecoin, an online token referencing a popular internet meme.