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HomeMarketTesla Keeps Losing Money on Bitcoin. But Elon Musk Is Still Holding.

Tesla Keeps Losing Money on Bitcoin. But Elon Musk Is Still Holding.

Tesla CEO Elon Musk has been an outspoken proponent of cryptocurrencies.

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Frederic J. Brown/AFP via Getty Images

continued to hold onto its digital assets through the depths of a brutal bear market, with the electric-vehicle maker recording a write-down on its
holdings after a turbulent fourth quarter. Elon Musk’s company shows no signs of selling.

(ticker: TSLA) wrote down the value of its digital assets to $184 million in the fourth quarter, a decline from $218 million in the third quarter. The price of Bitcoin fell to $16,500 by the end of December from around $19,500 at the close of September.

The automaker run by Elon Musk bet on crypto in early 2021, joining
(MSTR) as one of the few companies to hold Bitcoin in its corporate treasury. Tesla sold out of most of its position in the second quarter of 2022, dumping more than 30,000 Bitcoins or some 75% of its holdings and avoiding major losses.

Nevertheless, the group still holds Bitcoin, and—under accounting standards—will continue to write down the value of the assets as long as prices continue to drop below the purchase price. Tesla originally bought Bitcoin for around $30,000 a piece, riding the bull market up to the crypto’s all-time high near $69,000 in November 2021.

The picture has deteriorated since then, with crypto prices crashing last year. High inflation pushed the Federal Reserve to aggressively raise interest rates—a macro move that also weighed on Tesla stock, another risk-sensitive asset—with a string of frauds and failures across the crypto industry exacerbating Bitcoin’s decline.

A fourth-quarter write-down makes sense. Bitcoin prices hit a two-year low in November in the wake of crypto exchange FTX’s bankruptcy, which ushered in the last leg down in prices to a trough of about $15,500. Tesla holding through this period suggests the company has a strong enough stomach and may be unlikely to sell even if prices fall even further.

 But there are reasons to believe the picture for Bitcoin is looking up as 2023 gets underway.

Bitcoin prices have soared almost 40% since the start of the year amid wider optimism among investors that inflation is cooling and that the Fed will become less hawkish. It’s the same optimism—which may be gripping retail investors in particular—that has helped spur a rally in Tesla’s stock price, which has risen more than 30% in 2023.

More broadly, Tesla and other corporate crypto holders are awaiting an overhaul of accounting rules that will have an impact on how digital asset holdings are reported.

The Financial Accounting Standards Board in October said that companies should use fair-value accounting when they report digital assets like Bitcoin. Cryptos are currently not covered under accounting rules, which means that companies record them as “intangible assets” and write down their value if the price drops below the purchase price. Gains can only be recorded if the assets are sold, confusing disclosures around long-term investments and weighing on investors’ view of company crypto holdings.

A change to fair-value accounting would mean companies report their gains and losses linked to cryptos similarly to traditional financial assets, a move that has been touted as a factor that could help shift the needle on institutional adoption of digital assets.

That might be true. But so far, all signs are that Tesla will continue to hold.

Write to Jack Denton at


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