According to reports, Tesla is expected to face a significant loss on its Bitcoin holdings, amounting to approximately $440 million. This represents 9% of the company’s annual profit from last year. These figures will be reflected in Tesla’s quarterly results, which are due to be reported later this month.
The value of Bitcoin has plummeted by 60% since the beginning of this year, and nearly 75% from its all-time high in November. Factors such as rising interest rates, inflation, and numerous crises within the cryptocurrency industry have contributed to this decline. These circumstances have dampened enthusiasm for digital assets and triggered a decline in prices.
It is worth mentioning that Tesla briefly accepted Bitcoin as a payment method in the past, but CEO Elon Musk halted its use due to concerns about the environmental impact of Bitcoin mining. Musk, who is currently the wealthiest person in the world, has not personally sold any of his cryptocurrency holdings.
Other companies that have invested part of their cash reserves in Bitcoin, such as Block (owned by Jack Dorsey), Coinbase, and MicroStrategy, have also been affected by the slump in the digital currency. Collectively, the cryptocurrency market has lost a staggering $1.3 trillion in value this year.
Musk has recently announced that Tesla needs to downsize its salaried workforce by approximately 10%. This decision comes as the company’s newly established factories in Berlin and Texas are consuming substantial amounts of capital, and Musk predicts an impending recession in the United States.
Moreover, Tesla’s stock has declined by 44% this year due to both a general market sell-off and challenges in meeting demand. The closure of the company’s Shanghai plant, caused by lockdown measures, has also contributed to this decline.
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