Tesla recorded a $204 million impairment loss in 2022, according to the United States Security and Exchange Commission. Despite the loss, the electric vehicle manufacturer made a profit of $64 million from converting its bitcoin holdings to fiat currencies last year, Techcrunch reported citing the USSE commission. Overall, the automaker lost $40 million from crypto trading activities.
In the first quarter of 2021, the company had invested $1.5 billion in bitcoin and stated that it believed in the longevity of the cyptocurrency. The company said bitcoin was a great place to store cash and still access it immediately, providing a better return on investment than more traditional central banks. In fact, after its initial purchase, Tesla promptly trimmed its position by 10 per cent, making the automaker a quick $101 million, Techcrunch report said.
Elon Musk in March 202 said that Tesla would start accepting bitcoin as payments for Tesla vehicles, causing the price of the crypto to boom. A few weeks later, Musk and Tesla backpedalled on that decision, expressing concern about the amount of energy needed to mine bitcoin. The price of bitcoin then subsequently sank, the media outlet said.
In 2022 when the value of bitcoin became better, Tesla sold 75 per cent of its bitcoin holdings and used it to buy traditional currency. As of today, the company has $184 million worth of bitcoin.
Tesla, an automobile company was holding more than 1.5 billions in 2021 but lost it in the year 2022 when we had the bloodbath. Since Tesla had its image connected with bitcoin as well as reputed automobile industry it was definitely forceful decision to sell it all in the long run.
But, they did it playfully and saved as much as 64 million dollars in profit when bitcoin shown its volatility waves. Tesla also trimmed almost 10 percent of profit from the company itself to balance out it.
The important lesson: No matter if you are individual OR big company you have to have perfect timing for buying and selling. Moreover, you need to know proper strategy to play (no matter how many fouls it would do) but you have to save up your investments and make profits.
