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Elon Musk miscalculated? Tesla Lost Hundreds of Millions Due to the Bitcoin Crash

Elon Musk’s Tesla lost about $440 million due to the Bitcoin crash. Tesla bought $1.5 billion worth of bitcoin early last year, making it the largest company to convert some of its cash reserves into cryptocurrencies.

Bitcoin has crashed to an 18-month low over the past couple of months and is now worth less than $20,000. Today, the company’s bitcoin assets are valued at $820.8 million, up from $1.26 billion three months ago.

This means Tesla is likely to record an impairment of around $440 million in its bitcoin holdings, equivalent to 9% of its full-year profits last year, when it releases quarterly results later this month.

The price of the cryptocurrency is down 60% from $46,700 at the beginning of the year and almost 75% from its all-time high in November. Rising interest rates and inflation have blunted interest in digital assets, while prices have also been hit by a series of crises in crypto companies.

Tesla briefly adopted bitcoin as a payment method last year, but suspended its use after Musk raised concerns about its carbon footprint. Earlier this year, the richest man in the world said he did not personally sell his cryptocurrency holdings.

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