By Bitcoin.com - 8 months ago - Reading Time: 2 minutes
Elon Musk’s Spacex Writes Down Bitcoin Worth $373 Million
Spacex reportedly wrote down the value of its bitcoin holdings by $373 million over the past two years and sold an undisclosed amount of the cryptocurrency. According to reports, Tesla, another company run by billionaire Elon Musk, has taken a similar approach with its bitcoin holdings.
Spacex Writes Down $373M in Bitcoin Value
On Thursday, the Wall Street Journal reported that Elon Musk’s Spacex has written down its bitcoin investments, citing documents it has seen. The news outlet wrote:
Spacex wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency. Tesla has taken a similar approach with its bitcoin holdings. Musk has posted about cryptocurrencies frequently over the years.
This led to numerous headlines claiming that Spacex had liquidated its entire bitcoin holdings, sending the price of bitcoin tumbling.
However, many people took to social media to point out that writing down investments is a standard accounting practice for businesses and does not imply that the investments have been sold or liquidated. For example, a company might write down the value of its inventory if its market value has declined, yet retain the inventory until it is no longer needed.
Tesla and Spacex Adopt Similar Bitcoin Approach
Although Elon Musk revealed in July 2021 that Spacex owned bitcoin, the details of the company’s BTC holdings remain largely undisclosed. In contrast, there is greater transparency regarding Tesla’s bitcoin position. According to the Wall Street Journal, both companies have adopted a similar approach to their bitcoin holdings.
During the first quarter of 2021, Tesla purchased bitcoin valued at $1.5 billion. The company subsequently trimmed its BTC stash twice: once also in Q1 2021 and the other instance in July last year — the same years Spacex reportedly wrote down its bitcoin holdings.
In Q1 2021, Tesla sold $272 million in BTC. Musk clarified that the sale was “to prove liquidity of bitcoin as an alternative to holding cash on balance sheet.” In July last year, the company sold approximately 75% of its bitcoin, which added $936 million in cash to its balance sheet. Musk explained that the company needed to “maximize” its cash position due to “the uncertainty of the Covid lockdowns in China.” The billionaire stressed:
We are certainly open to increasing our bitcoin holdings in the future, so this should not be taken as some verdict on bitcoin.
Despite the two BTC sales, Tesla still owns bitcoin valued at $184 million, as disclosed in the company’s Q2 financials.
What do you think about Spacex writing down its bitcoin investments? Let us know in the comments section below.
Original source: Bitcoin.com