Tesla (TSLA) Reports Almost $2B Worth of Bitcoin Holdings in 2021

It had impairment charges of $101 million related to volatile crypto prices

Electric carmaker Tesla, Inc. (TSLA) held almost $2 billion worth of Bitcoin (BTCUSD) on its balance sheet at the end of 2021, the company reported in an SEC filing on Monday, Feb. 7. That figure represents a healthy gain of 33% from the $1.5 billion it spent on buying the asset earlier that year. The carrying value of Tesla's Bitcoin holdings at the end of 2021 was $1.26 billion, and their market value was $1.99 billion.

Key Takeaways

  • Electric carmaker Tesla reported $1.99 billion worth of Bitcoin on its balance sheet at the end of 2021.
  • The company purchased $1.5 billion worth of Bitcoin at the beginning of the year and sold some of its stash for a profit in March 2021.
  • Tesla reported impairment charges due to drawdowns in crypto prices. It ended the year with an impairment charge of $101 million for its Bitcoin holdings.

Bullish on Bitcoin

Tesla is among the few publicly listed companies with Bitcoin on its balance sheet. Its CEO Elon Musk has long been bullish on Bitcoin, an asset whose price breached new price highs during the pandemic. The company also accepts bitcoin for purchases of certain products on its website.

As Bitcoin's price reached stratospheric heights, culminating in a high of almost $68,000 in April 2021, Tesla sold some of its Bitcoin stash for $272 million and collected a profit of $128 million from the transaction. A subsequent drawdown in crypto prices forced the company to record impairment charges—losses in the value of its holdings—in successive quarters. It recorded impairment charges of $51 million and $23 million during the third and second quarters of 2021. The recent filing revealed that Tesla had total impairment charges of $101 million related to Bitcoin in all of 2021.

The company may have to report more losses this year. The trajectory of crypto markets has reversed in 2022. The price of Bitcoin fell by almost 50% from its highs last year after investors recalibrated their portfolios to shed risky assets in anticipation of a rise in interest rates.

But Tesla is not backing off from its Bitcoin bet. "We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash," the company stated in its filing. It also said that it would increase or decrease its holdings of digital assets based on its view of "market and environmental conditions."

Article Sources
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  1. SEC. "Tesla Filing."

  2. Coindesk. "The Elon Effect: How Musk's Tweets Move Crypto Markets."

  3. CNBC. "Tesla Records $23 Million in Bitcoin-Related Impairment Charges."

  4. Coindesk. "Tesla Takes Impairment Charge on Bitcoin Holdings."

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