Tesla and MicroStrategy together lose more than $1.5 billion on bitcoin investments
Tesla and Microstrategy have a combined loss of nearly $1.5 billion on their bitcoin investments, raising doubts whether they will keep them.
As the bear market bites, holding cryptocurrency investments can be a hard pill to swallow. Consider two of the largest publicly traded cryptocurrency position holders. They dropped nearly $2 billion on their bitcoin purchases.
According to CoinGecko, the 130,000 and 43,000 Bitcoin held by Microstrategy and Tesla, respectively, are worth considerably smaller sums.
For Microstrategy, Michael Saylor spent nearly $4 billion ($3,965,863,658) on 129,218 BTC, roughly 0.615% of the total supply of 21 million. The drop in bitcoin’s price snatched previous gains: the investment is worth $3.1 billion ($3,074,987,824), a loss of $900 million. Additionally, in pre-market trading on Monday the 13th, Microstrategy (MSTR) shares fell to their lowest levels in months.
For Elon Musk, whose automotive company Tesla bought more than 40,000 bitcoins during the 2021 bull market, his $1 billion profit went south. The $1.5 billion cost base for 43,200 BTC, or 0.206% of the total bitcoin supply, is now worth $1 billion ($1,017,789,280), down nearly $500 million.
The total impairment loss (the loss of value) shared among bitcoin-believing billionaires is approximately $1.4 billion. Given that both companies are publicly traded, the July quarterly results will dissect precisely how much each company is losing on its bitcoin assets.
At one point in November last year, bitcoin surpassed Tesla’s market capitalization. Tesla’s market cap currently stands at approximately $721 billion, while bitcoin languishes at less than half a trillion dollars. Likewise, the total market cap for cryptocurrencies is plummeting, dropping below a trillion dollars.
For Microstrategy, the situation is even grimmer. Saylor will have to complete a loan if and when the price of bitcoin hits $21,000.
Saylor had already worked things out with investors, sharing that the $205,000,000 loan he had taken out required $410,000,000 in collateral. However, Microstrategy has over 115,000 BTC that it could promise if the price remains stable.
Ultimately, if the fallout from the “insolvency” reported by Celsius spreads, there could be more pain on the horizon. For some Bitcoin believers, like the first Bitcoin restaurant chain, Tahini’s, “nothing has changed”. They will continue to accumulate, albeit at much lower prices.