Elon Reports $440 Million Impairment Losses as BTC Drops

04-Jul-2022 By: Anirudh Trivedi

Elon Reports $440 Million Impairment Losses as BTC Drops

The largest cryptocurrency in the world, Bitcoin (BTC), has had difficulty keeping up with its recovery and has been under pressure as of late, selling at a price of $19,000. Elon Musk's Tesla Inc has been facing a $440 million write-down on its Bitcoin assets as a result of the significant price drop in BTC this year.

Last year in February 2021, Tesla invested $1.5 billion of its cash reserves in Bitcoin. As a result, the market experienced a massive frenzy, with Bitcoin reaching a high of $69,000 in November 2021. Even though Tesla sold part of its bitcoins last year, it still has the rest.

Tesla is facing $440 million in impairment losses as a result of the price of Bitcoin (BTC) falling more than 70% since the start of the year. The current estimated value of the company's Bitcoin investments is $820 million. The business had valued its Bitcoin holdings at $1.2 billion three months prior. This indicates that the company's Bitcoin assets have lost 33 percent of their value in only three months.

Tesla has begun to accept Bitcoin payments in addition to its investment for a very short time. Later on, though, it changed its mind due to environmental issues with bitcoin mining.

Tesla is not the only company to invest a portion of its capital in bitcoin. This strategy has been used by other businesses including MicroStrategy, Coinbase, and Block Inc.

BTC At A Critical Junction

As previously said, Bitcoin's price is still being pressured at about $19,100. According to market expert Ali Martinez, “Bitcoin transaction history indicates that $BTC must quickly retake $19,500 as support in order to prevent a decline to $16,350.”

However, if Bitcoin (BTC) is able to close consistently above $19,600, we may observe more bullish market activity up to $22,000. Watching what the market has to offer for the upcoming week will be intriguing.

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