Tesla (TSLA) lost over $500 million in value from its Bitcoin investment amid what people are now calling a “crypto winter.”
At the start of 2021, Tesla invested $1.5 billion in Bitcoin.
Soon after, the automaker started accepting cryptocurrency as payment on new vehicles.
However, a few days later, Tesla took a step back from crypto by removing the Bitcoin payment option. The company raised concerns about the energy needs of the Bitcoin network:
Tesla has suspended purchases of vehicles using Bitcoin. We are concerned about the increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of all fuels.
It’s a concern that many in the Tesla community shared when Tesla first announced its investment in Bitcoin, and many were angered that the company didn’t think of it in the first place.
At the time, Tesla noted that it was not selling its bitcoin stake and that it planned to resume bitcoin payments once the grid showed a higher renewable energy mix.
A year after the investment, Tesla’s bitcoin holdings grew to $2 billion just a few months ago.
But in the world of crypto, a lot can change in just a few months.
Several major cryptocurrencies have seen significant declines in value amid the general market downturn, and Tesla’s Bitcoin investment is now worth $905 million, according to Bitcoin Treasuries, which tracks companies’ Bitcoin holdings:
This means that Tesla lost nearly $600 million in value from its Bitcoin investment.
The only good news for Tesla here is that its Bitcoin stake is only 10% of its cash and 0.1% of its total market capitalization.
Tesla CEO Elon Musk has also personally invested in Bitcoin, and he’s used the “diamond hands” meme in the past, which usually indicates he plans to keep the investment.
Musk also said he believes Tesla will start accepting bitcoin payment again as he sees improvements in the energy mix of bitcoin mining.
More recently, Tesla has also directly contributed to improving the use of renewable energy in bitcoin mining with Megapacks at a bitcoin mine in Texas.
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