To The Moon

In a U.S. Securities and Exchange Commission filing on Monday, Tesla ($(TSLA)$) said it had massive holdings in bitcoin...

The company noted it had $1.99 billion worth of bitcoin after purchasing a total of $1.5 billion last year.

Jan 2021, Tesla noted in its 10-K :

In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term.

At That period, the electric-vehicle manufacturer had briefly accepted the digital coin as a payment option for its products.

However,TSLA stopped offering this service in May over environmental concerns, weighing on bitcoin's value in the process. Even so, while the cryptocurrency had declined to $30,000 in July, it ultimately finished the year at $46,000 – marking a 60% increase for the 12-month period ending December 31.

In its latest 10-K filing, Tesla said it took an impairment loss of about $101 million for the year ended Dec. 31, 2021, due to changes in the company’s bitcoin book value. As of December 31, 2021, the fair market value of Bitcoin held by Tesla was $1.99 billion. ,

In the announcement, Tesla said that for an asset like Bitcoin, any decline would recognize an impairment charge, and prior to a sale, there may not be an upward correction to any market price increase.

"It's more evidence that cryptos are 'crossing the chasm' from early adopters to the early majority," said Stansberry Research analyst Eric Wade in an issue ofCrypto Capital. "As more buyers enter the market, there simply isn't enough supply to meet demand."

Eric added that even with some volatility, there is a different class of buyers supporting bitcoin's move higher. He noted thatTSLA's addition of bitcoin to its balance sheet increased the validity of the digital asset in the mainstream market. And this could ultimately result in a flood of new crypto investors moving forward.