Elon Musk and Tesla are about to unleash yet another tsunami after erroneous claims of the introduction of a Bitcoin spot ETF have sent the cryptocurrency market into a tailspin this week. The major manufacturer of electric vehicles is about to disclose its holdings in Bitcoin in its financial report for the third quarter of 2023, which will have a significant impact on the world of digital assets.
When Tesla announced intentions to accept Bitcoin as payment for its automobiles and made a billion-and-a-half-dollar investment in the cryptocurrency two years ago, the move greatly increased Bitcoin’s market value at the time.
In the second quarter of 2023, Tesla revealed that it had not acquired nor sold any Bitcoin, continuing to hold a steady balance of $184 million in digital assets.
Accounting issues
Importantly, throughout this time, the price of Bitcoin dropped from roughly $30,600 to $28,500. As long as the assets are still unsold, Tesla is unable to recognise a profit under current accounting regulations. However, accounting regulations would permit the valuation of these assets to be decreased in the case of a significant decline in Bitcoin prices.
It’s interesting to note that Tesla previously sold Bitcoin in the second quarter of the previous year for a remarkable $936 million, offloading more than 30,000 BTC, or about 75% of its holdings.
Tesla’s most recent Bitcoin holdings report is highly anticipated by the crypto community, but the whole sector is also bracing for another significant change that may affect not just the price of Bitcoin but also how people feel about digital assets more broadly.
