Tesla, the electric vehicle maker affiliated with Elon Musk, has released its quarterly earnings results, reporting profits above $1 billion for the first time since its launch.

Tesla also stated that investing in Bitcoin made it incur losses of $23 million after the markets crashed during the second quarter of 2021.

Oddly enough, the only reference to Bitcoin appears in the “Profitability” section of the report, with the loss incurred by Bitcoin mentioned.

where it came in the report the following:

Positive impacts were partially offset by growth in operating expenses including an increase in SBC, RAM model S/X (negative margin in the second quarter), additional supply chain costs, lower regulatory credit revenue, a $23 million bitcoin-related decline and elements other.

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Tesla Loses $23 Million… But Did It Really Lose It?

The $23 million loss might seem easy to digest considering that Tesla invested about $1.5 billion in Bitcoin.

Its nearly 50% drop from Bitcoin’s all-time high is sure to cause concern among investors, especially those who fear a continuation of the downtrend that could accelerate when Bitcoin drops below $30K.

However, this law may be due to the exploitation of a legal loophole rather than an actual financial loss.

According to American standards, accountants must record the value of their investment in cryptocurrency at the time of their purchase.

If cryptocurrency prices go up, nothing will happen as long as the company continues to accumulate.

The company should only record the transaction in case of sale.

However, when prices fall, the company must record the decrease in its investment as an impairment charge.

Therefore, although sales gains may be recorded, the tax burden may be mitigated by decreases during the time the company has raised its coins, due to the classification of cryptocurrencies as an intangible asset of indefinite life.

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Effect of Elon Musk:

Buying Bitcoin from Tesla was crucial in the history of Bitcoin.

After a brief exchange of tweets between Elon Musk and the CEO of MicroStrategy, Tesla announced a massive purchase it had placed on a publicly traded company platform that holds bitcoin in its vault.

As a result, the price of Bitcoin has risen at a frantic pace, reaching its peak in April 2021.

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At that point, Tesla made more money from bitcoin than it did with the entire car.

However, another decision by Tesla almost decisively contributed to eradicating the trend, pushing Bitcoin into its biggest drop since late 2017.

The company’s announcement to stop receiving payments in bitcoin due to its environmental impact caused a panic in the markets that ended with a nearly 50% drop as the days went by.

However, Elon Musk recently acknowledged that Tesla could accept Bitcoin again if the network becomes green enough.

After Musk held a webinar with the CEO of Twitter, and a dose of optimistic rumors regarding Amazon’s potential acceptance of bitcoin, cryptocurrencies saw some rebounds led by bitcoin.

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