Technology

Tesla loses all profits from Bitcoin if the price falls below $30,000


The sharp drop in the price of Bitcoin caused Tesla’s investment to almost evaporate.

On July 21, Bitcoin at one point dropped to $29,600/copper. For Elon Musk and Tesla investors, it’s a warning. The sharp drop in Bitcoin value has made the return on investment 1.5 billion USD into this Tesla cryptocurrency disappeared.

According to the estimate of Fortune, Tesla bought 46,000 Bitcoins from the beginning of the year to February, with an average value of about 32,600 USD. In the first quarter, Tesla sold 10% of Bitcoin, equivalent to 4,600 coins.

Tesla lost money with Bitcoin 1

The Bitcoin deal made Tesla reap a lot of profits in the first quarter. Photo: Getty Images.

This company sold at the price 59,100 USD/coin, near Bitcoin’s all-time high. The deal helps the corporation earn 272 million USD and bring 101 million USD pre-tax profit in the first quarter.

At the end of the first quarter, Tesla still held 41,400 Bitcoins, equivalent to 1.33 billion USD. April 14, when Bitcoin peaked 64,800 USD, the value of the investment increases 2.68 billion USD. Tesla is recording a paper profit of 1.35 billion USD from Bitcoin. Plus profit 101 million USD In the first quarter, Tesla’s total paper profit 1.451 billion USD.

However, the profit depends on the rise and fall of Bitcoin, and when the price falls 28,900 USD By June, the interest had completely disappeared.

On July 20th, this profit was once again zero. At $29,600/dong, the number of Bitcoins Tesla is holding has dropped lower than it was originally. If Tesla sold them today, the company would break even on the investment 1.5 billion USD.

If Bitcoin drops to 25,000 USD/dong, Tesla will suffer a loss 300 million USD. In case the cryptocurrency drops to 20,000 USD, the loss will increase 500 million USD, which is equal to all the profits Tesla made in the first quarter.

Tesla lost money with Bitcoin 2

When the price of Bitcoin went low, entering Bitcoin by Tesla was no longer the right decision. Photo: Getty.

In April, when Bitcoin rallied sharply, investing in the cryptocurrency was like a visionary move. However, Tesla is facing the risk of losing profits in the first quarter or even suffering a loss.

Tesla can reassure investors if it reports business profits in the second quarter and the coming quarters. If it is not possible to make a good profit from the sale of the car, the investors of this company will have to question their decision to invest in Bitcoin with the recent price drops.

Follow Zing/Fortune

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