Spacex Writes Down $373M in Bitcoin Value
The Wall Street Journal reported that Spacex has written down its bitcoin investments by $373 million, leading to headlines claiming that the company had liquidated its entire bitcoin holdings. However, this is a standard accounting practice and does not necessarily mean the investments have been sold.
Tesla and Spacex Adopt Similar Bitcoin Approach
- Spacex and Tesla have both adopted a similar approach to their bitcoin holdings.
- Tesla purchased $1.5 billion worth of bitcoin in Q1 2021 and has since sold a portion to prove liquidity.
- In July last year, Tesla sold approximately 75% of its bitcoin to maximize cash position during the uncertainty of the Covid lockdowns in China.
- Despite the sales, Tesla still owns bitcoin valued at $184 million as of Q2 2021.
- Spacex’s BTC holdings remain largely undisclosed, but the company has also written down its bitcoin investments.
Hot Take
While the news of Spacex writing down its bitcoin investments may have caused some panic, it is important to understand that this is a common accounting practice and does not necessarily indicate that the investments have been sold. Both Tesla and Spacex have adopted a similar approach to their bitcoin holdings, with Tesla selling a portion to prove liquidity and maximize its cash position. The overall impact on the cryptocurrency market may have been exaggerated, and it is still possible for both companies to increase their bitcoin holdings in the future.
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