Bitcoin (BTC), the world’s largest cryptocurrency, has continued to fail to keep up with its recovery and is currently selling at a price of R311K. Following this year’s dramatic price drop, Elon Musk’s Tesla Inc (NASDAQ: TSLA) is facing a R7 billion write-down on its Bitcoin assets.
Last year, in February 2021, Tesla placed R24.5 billion of its reserve funds in Bitcoin. This caused a market euphoria, with Bitcoin topping out at R1 million in November 2021. Although Tesla sold some of its BTC last year, it still holds the majority.
Tesla is facing R7 billion in impairment losses since the price of Bitcoin (BTC) has dropped more than 70% since the beginning of the year. The company’s Bitcoin investments are currently valued at R13 billion. Three months ago, the business valued its Bitcoin investments at R19.6 billion. This indicates that the company’s Bitcoin holdings have declined by 33% in just three months.
Aside from its investment, Tesla has also begun taking Bitcoin payments for a limited time. It eventually reversed its judgment, citing environmental issues with Bitcoin mining.
Tesla is not the only company that has invested a portion of its cash reserves in Bitcoin. This strategy has been used by other companies such as MicroStrategy, Coinbase, and Block Inc. MicroStrategy, a business analytics firm, added to its holdings last week with a Bitcoin acquisition.
As previously said, bitcoin remains under pressure near R312K. According to market analyst Ali Martinez,
Bitcoin transaction history indicates that $BTC must retake R318.9K as support as soon as possible in order to avoid a drop to R267K.
If Bitcoin (BTC) manages to maintain a sustained closing above R320.6K, we should expect further bullish market activity up to R360K. It’ll be intriguing to see what the market has in store for the coming week.