Tesla and Microstrategy lose $1.5 bn together on BTC holdings
Michael Sayor's Microstrategy and Elon Musk's Tesla are facing hefty losses as a result of their investments in Bitcoin
By Shashank Bhardwaj
Two of the largest bag holders of Bitcoin, namely Tesla and Microstrategy, are facing losses of approximately $1.5 billion on their large Bitcoin purchases.
Elon Musk, the CEO of Tesla, acquired over 40,000 Bitcoins for his car firm, expecting a profit of about $1 billion from the bull market. This led to a fall of about $500 million in the value of 43,200 Bitcoins, which cost about $1.5 billion initially and equals 0.206 per cent of the entire supply of the 21 million bitcoins in circulation.
Microstrategy CEO Michael Saylor paid an amount of $3,965,863,653, i.e., approximately $4 billion for 129,218 bitcoins. This accounts for about 0.615 percent of the total Bitcoins in circulation. The investment’s worth has gone down to $3.1 billion. This means a loss equivalent to $900 million. Microstrategy stocks fell to an all-time low during the pre-market session this Monday.
These publicly traded companies have lost a hefty $1.4 billion on their Bitcoin investments. The July quarterly results will show the actual losses in Bitcoin assets between each of the two billionaires.
Bitcoin’s market worth went higher than Tesla’s for a brief period in November 2021. Tesla, however, has gathered funds worth $721 billion, while Bitcoin has received half a trillion dollars. The total value of all crypto assets has gone below $1 trillion for the first time.
The situation of Microstrategy has become bleak. If the price of Bitcoin rises over $21,000, the company will have to make loan repayments. After apologising to the investors, Saylor stated that the company’s loan worth $205 million had been backed by an additional security amount of $410 million.
If the price of Bitcoin does not show any promising highs in the near future, Microstrategy may have to spend a part of the about 115,000 BTC it possesses in cash.
However, if Celsius’ reported “insolvency” has a domino effect and goes on spreading, we could see more suffering on the Bitcoin front. Tahini’s, the first restaurant chain accepting Bitcoin as a form of payment, states that “Nothing has changed.” Bitcoin will continue to be collected but at much lower prices.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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