Tesla’s Bitcoin Holdings In Reverse
Bitcoin has continued its deep dive this weekend, falling from a high of $42,172 on Friday and hovering around $32,000 to $33,000 on Sunday afternoon. At one point it had fallen over 50% from its April 14 all-time high of $63,863.
As of March 31 Tesla TSLA owned $2.48 billion worth of Bitcoin with a carrying value or cost of $1.33 billion. Based on a price of $58,919 on March 31, the company owned 42,902 Bitcoins.
Elon Musk has tweeted that Tesla had not sold any Bitcoin, at least as of May 16, and before on May 12 he tweeted that the company had not sold any and that it was intending to use it for transactions.
Source: Elon Musk Twitter account
However, Tesla’s Bitcoins have fallen over $1 billion
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After peaking in mid-April the value of Tesla’s Bitcoins have fallen over $1 billion in value since March 31. At a price of $32,500 it brings the company’s Bitcoin value down to $1.37 billion. This makes Tesla’s Bitcoins only worth $38 million more than what it paid and the cryptocurrency only needs to drop by 3% to $31,600 to go into the red.
While a decrease of this magnitude has almost no impact to the company’s finances, as it had over $17 billion in cash at the end of March and a market cap of $559 billion, it does bring into question whether Tesla should be holding Bitcoin and potentially other cryptocurrencies due to their volatility.
While Musk has reiterated multiple times that the company won’t be selling its Bitcoins, it would not be out of character for him to change his mind. And Bitcoin hodlers may not find out about a course correction until after the fact.