Tesla (TSLA) has lost over $500 million in value from its Bitcoin investment amid what people are now calling a “crypto winter.”
Early in 2021, Tesla invested $1.5 billion in Bitcoin.
Shortly after, the automaker started accepting the cryptocurrency as payment on new vehicles.
However, a few days later, Tesla took a step back with crypto by removing the Bitcoin payment option. The company noted concerns over the energy needs of the Bitcoin network:
Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
This is a concern that many Tesla community members shared when Tesla first announced its Bitcoin investment, and many were angered by the fact that the company didn’t think about it in the first place.
At the time, Tesla noted that they were not selling their stake in Bitcoin and that they planned to resume taking Bitcoin payments once the network showed a higher mix of renewable energy.
A year after the investment, Tesla’s Bitcoin holding increased to $2 billion just a few months ago.
But in the crypto world, a lot can change in just a few months.
Several major cryptocurrencies have seen a major decline in value amid the broader market downturn, and Tesla’s Bitcoin investment is now worth $905 million, according to Bitcoin Treasuries, which tracks Bitcoin holdings from companies:
It means that Tesla has lost almost $600 million in value through its Bitcoin investment.
The only good news for Tesla here is that its Bitcoin holding represents only 10% of its cash position and 0.1% of its total market capitalization.
Tesla CEO Elon Musk has also personally invested in Bitcoin and he has previously used the “diamond hands” meme, which generally indicates that he plans on holding the investment.
Musk also said that he believes Tesla will resume taking Bitcoin payment as he sees improvements in the energy mix of Bitcoin mining.
More recently, Tesla also directly helped improve renewable energy use in Bitcoin mining with Megapacks at a Bitcoin mine in Texas.
FTC: We use income earning auto affiliate links. More.
Subscribe to Electrek on YouTube for exclusive videos and subscribe to the podcast.