Elon Musk hasn’t always made the wisest decisions for his business. Within that radius, Tesla’s acceptance (and subsequent abandonment) of bitcoin is one of the most prominent examples of such leadership failures. In early 2021, Tesla bought $1.5 billion worth of bitcoin and announced that it was starting to accept crypto payments to buy new cars.
However, just a few days later, Tesla announced that it would return to bitcoin as a means of payment. The firm then explained, “Tesla has suspended the purchase of cars in bitcoin. We are concerned about the rapidly growing use of fossil fuels for mining and trade, especially coal, which produces the worst emissions.” However, the manufacturer only spoke of a temporary “suspension”.
As of December 31, 2022, Tesla has sold 75% of its crypto assets.
Bitcoin payments could theoretically resume if the blockchain accepts renewable energy in its energy mix. A year later, Tesla owned the equivalent of $2 billion in bitcoin. But, as you know, the market has changed dramatically since then.
However, the company, far from “HODLing” its assets, did the opposite of what most investors recommended during the economic downturn: Tesla gradually sold its assets as the market continued to fall. However, this strategy de facto allowed the manufacturer to limit its losses. Even if they remain significant.
Thus, as of December 31, 2022, Tesla, according to official documents, sold 75% of its crypto assets. At the end of 2021, the firm revealed a loss of $101 million in connection with the sale of these assets. In 2022, the loss associated with the sale of these assets amounted to $204 million. To date, the firm has no more than $184 million in bitcoin.
“As of December 31, 2022 and 2021, our crypto assets were valued at $204 million and $101 million, respectively. The fair market value of such digital assets as of December 31, 2022 and 2021 was $191 million and $1.99 billion, respectively,” according to 10-K’s annual report filed with the U.S. Financial Markets Authority (SEC).
Everything indicates that the automaker is not ready to accept cryptocurrencies again in such a situation anytime soon. The only thing that can affect this strategy is the paradigm shift of cryptocurrencies in the US. Arizona is about to vote on legislation that could make bitcoin legal tender. This could eventually lead the United States to greater acceptance of cryptocurrencies as a means of payment.