Tesla hints at increasing cryptocurrency holdings and return of Bitcoin payments in SEC filing [Update]

Earlier this year Tesla purchased $1.5 billion worth of Bitcoin, making the announcement in a regulatory filing with the Securities and Exchange Commission (SEC).

Soon after the automaker began accepting the cryptocurrency as a method of payment for its vehicles. The option was limited to buyers in the U.S. and was short lived.

Less than two months after adding it to the Design Studio, Tesla said it was being removed due to concerns about the use of fossil fuels in Bitcoin mining.

CEO Elon Musk did leave open the possibility it could one day return, saying renewable energy usage in Bitcoin mining needed to increase to at least 50% before it would be considered.

In a 10-Q filing with SEC on October 25 2021, Tesla has again hinted Bitcoin as payment could soon be returning. (Update: The same wording was used in their 10-Q filing in June)

In the first quarter of 2021, we invested an aggregate $1.50 billion in bitcoin. In addition, during the three months ended March 31, 2021, we accepted bitcoin as a form of payment for sales of certain of our products in specified regions, subject to applicable laws, and suspended this practice in May 2021. We may in the future restart the practice of transacting in digital assets for our products and services. The fair market value of our bitcoin holdings as of September 30, 2021 was $1.83 billion.

They also hinted that at any time they could increase their cryptocurrency holdings.

Interestingly their wording did not specify Bitcoin, instead using the term “digital assets” suggesting they could purchase other cryptocurrencies such as Ethereum or the fan favourite, Dogecoin.

We believe in the long-term potential of digital assets both as an investment and also as a liquid alternative to cash. As with any investment and consistent with how we manage fiat-based cash and cash-equivalent accounts, we may increase or decrease our holdings of digital assets at any time based on the needs of the business and our view of market and environmental conditions. Digital assets are considered indefinite-lived intangible assets under applicable accounting rules.

Tesla has had a bit of wild ride with their existing Bitcoin holdings. Soon after their purchase, the price of Bitcoin plummeted to under $30,000 USD. The drop resulted in Tesla recording a $23 million impairment in Q2 2021 due to the $1 billion loss.

They are back in positive territory as the price has since rebounded to over $62,000 USD at the time of publication.

After dipping into negative territory, Tesla’s Bitcoin investment back up by $1 billion

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