Elon Musk’s description of cryptocurrency as a “sideshow” caused Tesla billions

In the first quarter of 2021, Tesla invested $1.5 billion in bitcoin, anticipating that consumers will start buying its electric cars using the cryptocurrency. Musk cited the high energy costs associated with mining it as the reason why it quickly broke that promise.However, following a bull rise through the bulk of 2021, when prices peaked, 2022 saw a massacre for the great majority of crypto assets. The market was also affected by the failure of stablecoin Terra, the collapse of FTX, and an increase in interest rates and inflation that reduced the attraction of riskier investments like bitcoin.Image source- ForbesOver the course of the year, Bitcoin lost close to 65% of its value, ending it at roughly $16,548. At the beginning of 2022, Tesla paid between $30,000 and $40,000 for the token.
Tesla said that because to the decline in value of bitcoin, it had to take an impairment charge of $204 million on it in 2022. This was somewhat offset by its choice to convert $64 million worth of the most popular cryptocurrency into fiat money, which resulted in a net non-cash loss on its bitcoin holdings of $140 million.During the results call, Musk described Tesla’s involvement with cryptocurrencies as a sideshow to the sideshow after being asked about the asset’s long-term survival as it battled against the impacts of inflation on the economy.With regard to cryptocurrencies, Musk said, We’re neither here nor there.Tesla’s current stance on bitcoin is probably much stronger than it was at the end of last year. In an indication of resuming bullishness for riskier assets after a gloomy 2022, the price of bitcoin has increased by more than 40% through 2023.Share your thoughts with us in the comments.