Tesla published its Q3 earnings and reported a $51 million impairment charge on its Bitcoin holdings for the previous quarter.
An “impairment charge” represents a figure that describes the reduction in the recoverable value of a fixed asset. This can happen, in the case of digital assets, as a result of their price dropping due to volatility.
But Tesla can’t say it’s “impaired” by its Bitcoin holdings.
In Q1, Tesla revealed that the value of Bitcoin holdings it had was $2.48 billion – back then, the price of BTC was worth $59,000, meaning that Tesla owned about 42,000 Bitcoin.
The original price paid for the BTC held by Tesla at the end of Q1 was $1.33 billion, which would imply a sell of $170 million worth of Bitcoin if we go by carrying value. This was done “to prove liquidity of Bitcoin as an alternative to holding cash on the balance sheet.”
Tesla also showed that it recorded a $101 million “positive impact” (aka profit) from its sale of 10% of the holdings by the end of March – the monetary value of the sold BTC was more than $270 million.
This means that if the “holding value” of the Bitcoin held by Tesla, following the sale is $1.33 billion, and it owns about 42,000 BTC, the price that it actually paid for them has an average of $31,620.
After the new increase in the price of Bitcoin, which is now worth $63,500, it means that Tesla holds more than $2.67 billion in Bitcoin, aka an increase of over 1 billion dollars since the beginning of the year.