Why Did They Sell $373 Million In Bitcoin Holdings?
SpaceX, the aerospace company founded by tech mogul Elon Musk, reportedly took a significant step in reshaping its financial portfolio by recording a write-down of $373 million on its Bitcoin holdings in the past two years.
According to a report from The Wall Street Journal, the company not only acknowledged the devaluation of its Bitcoin assets but also indicated the possibility of divestment.
A write-down in the context of cryptocurrency holdings refers to the reduction in the recorded value of a digital currency asset on a company’s balance sheet.
This reduction typically occurs when the market value of the cryptocurrency drops significantly, leading to a situation where asset’s market value is now lower than its original purchase price or previously recorded value.
In 2021, Musk publicly disclosed that SpaceX had entered the world of cryptocurrencies by acquiring an undisclosed amount of Bitcoin. Simultaneously, his other venture, Tesla, made headlines by revealing its plans to invest a whopping $1.5 billion in the digital currency.
A Shift In Strategy For SpaceX
Fast forward to the present, and it seems that SpaceX’s stance on Bitcoin has evolved. The company’s balance sheets for both 2021 and 2022 indicate that it valued its Bitcoin holdings at $373 million, only to subsequently record a write-down on these assets.
The move comes amidst revelations that SpaceX’s expenditures for 2022 totaled around $5.2 billion, with an additional $5.4 billion directed toward property acquisition, equipment, research, and development.
Bitcoin’s Recent Performance
Coinciding with SpaceX’s reported actions, Bitcoin’s price has experienced notable fluctuations. The cryptocurrency’s value has plummeted by 7.0% in the last 24 hours alone, marking a 9.6% decline over the past week.
Literally took more liquidations than we got during the FTX collapse to flush us this low and we couldn’t even break HTF bullish market structure. $BTC didn’t go below 26k on most spot exchanges- went lower on perps/leveraged products because of the liquidations.
Right inside… https://t.co/lKJh4M0W7E pic.twitter.com/Vdxr0Zd5Zv
— CrediBULL Crypto (@CredibleCrypto) August 17, 2023
However, amidst the market turmoil, influential crypto analyst “Credible Crypto” has predicted that this downturn may signify the bottom for Bitcoin’s price. He emphasizes that Bitcoin’s macro bullish trend remains intact and asserts that the currency remains in a bullish position over the long term.
Bitcoin (BTC) is currently trading at $26.444. Chart by TradingView.com
Meanwhile, the Journal report regarding SpaceX’s Bitcoin write-down has baffled cryptocurrency enthusiasts. Some questioned if SpaceX had sold $373 million worth of Bitcoin between 2020 and 2021, or simply reduced their Bitcoin activity by that amount.
I actually read the WSJ report. I think @BitcoinMagazine is wrong here
Yes, the report claims that SpaceX marked down the value of their bitcoin by 373m (btw, that doesn’t mean they SOLD 373m) and sold *some*, but selling some doesn’t necessarily mean they have no bitcoin left https://t.co/rLgwA0N8Zi pic.twitter.com/GSrOio7zku
— Pledditor (@Pledditor) August 17, 2023
Social media outlets reported conflicting information about the company’s sale of its entire BTC holdings. While some claimed the sale occurred, others were uncertain because of the vagueness in wording in how the story was presented.
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Featured image from The Motley Fool
