In Q3 of 2021, Tesla lost $51 million due to a drop in bitcoin price

Tesla reported $1.3 billion in earnings from the purchase of Bitcoins in early 2021, but a loss of $51 million in the third quarter of this year owing to a temporary decrease in the value of the primary cryptocurrency.

The electric vehicle manufacturer announced a 57 percent rise in sales for the third quarter of 2021, from $8.77 billion to $13.76 billion. The quarter’s net profit was $1.62 billion.

The company’s weak spot turned out to be previously bought crypto assets, which lost a total of $51 million owing to Bitcoin’s sharp decline. As a result, Tesla‘s cryptocurrency investment dropped from $1.31 billion to $1.26 billion. In terms of manufacturing scale, in Q3 2021, the carmaker increased capacity to roll off the assembly line more than 238,000 electric vehicles and deliver more than 240,000 automobiles, resulting in a 14.6 percent operating margin.

The firm has refused to make Bitcoin transactions for the previous two quarters, claiming environmental concerns that run against the internet giant’s strategy. Elon Musk claimed in February 2021 that Tesla had invested $1.5 billion in Bitcoin, but by April, it had sold 10% of the total. Although Musk has stated that the internet giant would not “get rid” of its digital currency reserve in the future.

If Tesla classifies cryptocurrencies as “an intangible asset with an endless life,” the FASB expects it will immediately notice a decline in Bitcoin quotes. But, of course, we’re talking about situations in which the market’s major crypto asset falls below the price at which the firm purchased it.

Musk stated in July 2021 that the amount of renewable energy used for Bitcoin mining had reached 50% or possibly beyond this number owing to the “exodus of Chinese miners” and other causes. As a result, the firm may be able to purchase even more BTC in the future.

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