In its latest report, Tesla suggested that they see Bitcoin as an alternative currency in the future. The electric car company has been saving Bitcoin for over a year and has not bought another cryptocurrency.
The American electric car company belonging to Elon Musk provided further details on why it invests in Bitcoin (BTC). They also reported their latest movements in the cryptocurrency after making a multi-million dollar purchase in early 2021.
Tesla stated that they believe in the long-term potential of crypto assets as an investment and liquid alternative to cash. That indicates that they not only see them as a strategy to increase their funds but also as currencies to replace the US dollar.
For that reason, Tesla has been holding Bitcoin in its reserves for more than one year. The Buy Bitcoin Worldwide explorer positions it as the second company with the most funds in the cryptocurrency, following MicroStrategy. It shows that Tesla has 42,902 BTC, the figure they reported at the end of the first quarter of 2022.
Tesla Warns about Security Gaps in Bitcoin and Its Unclear Regulation
According to applicable accounting standards, Tesla stated that crypto assets are intangible and with an indefinite lifespan. They said that because they consider their long-term adoption by investors, consumers and companies to be unpredictable. They added it lacks a physical form, depends on technology for its creation, existence, and transactional validation, and is decentralized.
From the company, they commented on factors that pose risks to cryptocurrencies, like not having centralized issuers or government agencies. They think that this makes those intangible assets subject to security breaches, cyberattacks, human error, or computer failure. They argue that those aspects may result in the loss or destruction of the private keys needed to access them.
Given that context, they assured that they would take careful measures but could lose their Bitcoin partially or totally if they cannot combat those threats. They said that this would also affect their financial condition and operating results. Besides, they stressed that regulations on digital assets are unclear and may change in the future, raising concerns about their holdings.
They also explained they would take action if they suffered losses for having part of their reserves in Bitcoin. However, they have not yet bought more BTC or sold their holdings, confirming that they have not had negative results.
Tesla Has Saved Bitcoin for over a Year
Although the Bitcoin price dropped in the first quarter of 2022, Tesla stated they had suffered no losses on their holdings. When they bought the cryptocurrency in January 2021, it was worth less than today. At that time, the value of BTC went from USD 29,000 to USD 34,000, but it is now at around USD 38,200.
The electric car company said that the volatility in the price of cryptocurrencies could negatively affect their profitability. However, they believe that crypto assets allow improving long-term returns due to the potential they see in them.
They showed that Bitcoin is the only crypto asset they have held in their reserves. That is striking, given the enthusiasm of its CEO, Elon Musk, about Dogecoin (DOGE), an altcoin worth less than USD 1.
By Alexander Salazar
