Ilona Mask bitcoin bet could cost Tesla $ 100 million

Tesla made a $ 1.5 billion investment in bitcoin in February this year.  According to CNBC, this investment may come back to bite it due to the recent drop in cryptocurrency prices. 

Bitcoin accounting
Tesla may have to list its bitcoin assets as a loss, according to CNBC’s Kate Rooney. 

In February, Tesla announced its $ 1.5 billion investment. Under rules set by the Securities and Exchange Commission (SEC), assets of any intangible asset, such as bitcoin, must be disclosed as impairment if those assets fall below the value at which they were purchased. 

When news of Tesla’s investment came in, bitcoin was worth about $ 38,000. It has since fallen to $ 31,000, meaning Tesla faces a balance depreciation.

Worse, Tesla cannot flag the value of bitcoin if the cost increases after the investment. This can only happen if and when Tesla decides to sell bitcoin. 

“The analysts I spoke to expect a loss of decidedly between $ 25 and $ 100 million for Tesla in the next quarter, on paper, “Rooney said, noting that this is not an exact science:” this is really a Rubik’s Cube to learn from.”

“The most important thing that the crypto and analytics communities are looking at is: Does Tesla sell every bitcoin a quarter to recoup some of those losses?”Tesla sold 10% of its bitcoins in the first quarter of the year, and CEO Elon musk explained that he did so” to prove bitcoin’s liquidity as an alternative to keeping cash on the balance sheet.”& quot;

2. crude bitcoin in the quarter
The second quarter of 2021 was a turbulent period for bitcoin-related companies, which is because the price of bitcoincryptocurrency cryptocurrency has risen from US $ 63,000 to less than US $ 30,000. 

Elon musk tells investors about bitcoin’s carbon footprint: survey
Overall, it was one of the worst quarters in Bitcoin history, with bitcoin yields down 40% from 102% in the previous quarter.

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