Elon Musk's Tesla Loses Money in Bitcoin Rout – TheStreet

The few established companies that have added bitcoin to their balance sheets are now beginning to see this investment go awry. 
This now takes in Tesla  (TSLA) – Get Tesla Inc Report, the market leader in high-end electric vehicles.
Tesla invested $1.5 billion in virtual currency on Feb. 8, 2021, and said it was beginning to accept it as payment for buying Tesla cars. 
The move came days after Chief Executive Elon Musk temporarily changed his Twitter mini-description to simply #bitcoin. The announcement was a mark of confidence in cryptocurrency.
Bitcoin prices then jumped past $42,000.
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Tesla claimed that this investment in bitcoin was aimed at diversifying its sources of liquidity and gaining flexibility in order to be able to largely remunerate its shareholders.
But a few months later, in May 2021, Tesla indicated that it no longer accepted bitcoin as a means of payment. It cited as a reason that it wanted to preserve the environment since minting of bitcoins consumes enormous amounts of electricity. 
According to a Nature study, if nothing is done, China's IT mines will produce 130.5 million metric tons of carbon dioxide emissions by 2024, nearly the total annual greenhouse-gas emissions from greenhouses in Italy or Saudi Arabia.
For several months, Tesla's bitcoin gamble paid off, especially when the price hit an all-time high of $69,044.77 on Nov. 10. But since then prices have plummeted and are currently hovering around $31,000.
The bitcoin-price slump puts Tesla's initial investment in the red. Indeed, the Austin company seems to have lost money. According to Bitcoin Treasuries, Tesla's 43,200 bitcoins purchased for $1.5 billion are currently valued at $1.35 billion, down $150 million, or about 15%.
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The company is the only established company whose bitcoin-holding value has dropped into the red. But MicroStrategy  (MSTR) – Get MicroStrategy Incorporated Class A Report, the company with the most bitcoins on its balance sheet, is not far from losing money, too. Its 129,218 bitcoins purchased at a value of $3.97 billion are currently valued at $4.04 billion.
Bitcoin and cryptocurrencies are currently suffering from growth fears, like the equity market. Those concerns are prompting investors to liquidate risky assets, as the Federal Reserve raises interest rates to curb inflation.


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