Tuesday 27 July 2021 1:33 pm

Elon Musk’s Twitter antics pushes Tesla's $23m loss in Bitcoin assets

Tesla’s lofty revenue, which surpassed analyst expectations today, has been offset by a $23m loss over Bitcoin which pushed the electric carmaker to dial back its investments.

Elon Musk’s carmaker did not buy or sell any digital assets in its second quarter, as it dialled back investments after purchasing some $1.5bn in Bitcoin in the first quarter of this year.

Tesla holds its Bitcoin as an “intangible asset” which means the firm must report an impairment loss when the crypto currency’s price drops below what it was bought for. 

‘Unnecessary own goal’

While digital assets like Bitcoin are known for their volatility, Musk’s Twitter antics have puppeteered even more market instability – which could have fuelled the loss.

“There have been missteps – and it’s hard to see a $23m write-down in the value of the group’s Bitcoin hoard as anything other than an unnecessary own goal,” equity analyst at Hargreaves Lansdown said.

The billionaire, who also owns SpaceX, announced to his 56m Twitter followers earlier this year that Tesla would accept Bitcoin as payment for its vehicles – which pushed crypto prices sky-high.

In late March, Tesla said its $1.5bn investment in Bitcoin was worth $2.48bn thanks to the surge in its price in the first quarter.

However, there was a swift pivot away from the cryptocurrency last month when Musk decided Bitcoin’s carbon footprint was too big to ignore while selling eco-friendly cars.

Musk continued to post a string of jabs at the digital asset, which not only shook Bitcoin but Ethereum, Cardano and BNB too.

With just a few tweets, Musk knocked Bitcoin’s valuation off its $40,000 pedestal and back into the $30,000s.

But Bitcoin has undergone somewhat of a revival in the past 48 hours in terms of its valuation – flying to over $39,000 yesterday.

Sales trader at digital asset broker GlobalBlock, Marcus Sotiriou, said: “Bitcoin has broken out of a six-month-long downtrend on the RSI, after a failed breakout two weeks ago.

“In comparison, this time the breakout has been clean and decisive, suggesting this could be the start of a major trend reversal.”

However, Sotiriou explained that Bitcoin needs to recover its position of around $42,000 to be “bullish” and perhaps survive such Twitter antics in the future.