Elon Musk’s Tesla faces $440 million loss on its BTC holdings as whales continue to pour

  • Bitcoin price drops below $20,000 again, pushing automaker Tesla toward a $440 million writedown on BTC holdings.
  • Tesla racked up $1.5 billion in Bitcoin in 2021, but the automaker’s gamble turned into a loss during the crypto bloodbath.
  • Whales are rapidly depositing bitcoins on exchanges, fueling increased selling pressure.

The electric car maker faces a dire fate as its Bitcoin holdings devalue further amid a market rout that sees whales gearing up to sell by rapidly pouring their Bitcoin onto crypto exchanges. Tesla is already facing a $440 million write-down of its Bitcoin holdings after the recent cryptocurrency market bloodbath, and could do even more.

Tesla Prepares to Record Writedown on Bitcoin Holdings

Bitcoin price slipped below $20,000, hitting an 18-month low. This is bad news for Tesla, which bought $1.5 billion worth of Bitcoin in 2021. The move drew a backlash from investors as the company heads for a writedown. Part of Tesla’s cash reserves moved into cryptocurrency, however, the decision backfired when Bitcoin price crashed during the recent crypto bloodbath.

Tesla recorded the value of its Bitcoin holdings at $1.26 billion three months ago. The actual market value of Tesla’s holdings at the time was close to $2 billion, however, it was unable to record these gains on its investments, as they were unrealized (they had not yet been realized). sold), in accordance with accounting practices.

However, with the recent drop in Bitcoin price (to the $19,000 level), on the last day of Tesla’s second financial quarter, the company’s holdings are now worth around $820.8 million. Elon Musk’s Tesla is therefore likely to record a writedown on its Bitcoin holdings of around $440 million, or 9% of the automaker’s annual profit in 2021.

When Tesla releases its quarterly results in July 2022, it is likely to make that announcement and take a $440 million writedown on its big Bitcoin bet.

Bitcoin Addresses Underwater Surpass March 2020 Record

Based on data from crypto-chain company Glassnode, the weekly moving average number of unique Bitcoin addresses in loss peaked at 18.8 million on July 3, 2022. The data revealed that the average Bitcoin holder was hit by the worst monthly loss since 2011 in the current bloodbath.

Bitcoin: Number of losing addresses

CryptoQuant analysts reveal that the Whale Ratio metric, an indicator that reveals the selling behavior of large portfolio investors, points to a low Bitcoin price soon. The Whale Ratio metric is calculated by dividing the top 10 Bitcoin inflows to exchanges by all inflows in a single day. High values ​​of the metric indicate price fluctuations.

The analyst noted that whales are rapidly depositing their Bitcoin holdings on cryptocurrency exchanges and making massive losses. The bitcoin price should therefore find a bottom soon and the next bull cycle will then begin.

Analysts Predict Bitcoin Price Could Bleed Further

Netcost-Security analysts assessed the Bitcoin price chart and revealed that the asset wanted to drop below $18,817, its lowest level in seven days. For more information and the main prices to watch, watch this video:

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