The world’s largest cryptocurrency Bitcoin (BTC) has struggled to keep up with its recovery and has been trading under pressure at a price of $19,000. After the massive price crash in the BTC price this year, Elon Musk’s Tesla Inc (NASDAQ: TSLA) has been facing a $440 million write-down on its Bitcoin holdings.
Last year in February 2021, Tesla parked $1.5 billion of its reserve cash into Bitcoin. This created a major euphoria in the market with Bitcoin peaking at $69,000 in November 2021. Although Tesla sold some of its BTC last year, it continues to hold the rest.
With the Bitcoin (BTC) price plummeting more than 70% since the beginning of the year, Tesla is facing impairment losses to the tune of $440 million. Currently, the company’s Bitcoin investments have an estimated worth of $820 million. Three months ago, the company had recorded the value of its Bitcoin investments at $1.2 billion. This means, that in just three months, the company has seen its Bitcoin value holdings erode by 33%.
Apart from its investment, Tesla has also started accepting Bitcoin payments for a very brief period. However, it later decided to withdraw its decision citing environmental concerns with Bitcoin mining.
Tesla is not alone to park part of its cash reserves into Bitcoin. Other companies like MicroStrategy, Coinbase, and Block INc. have adopted this route. Business intelligence firm MicroStrategy continues to add further with its latest Bitcoin purchase last week.
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Bitcoin (BTC) At A Critical Junction
As said, Bitcoin continues to trade under pressure around $19,100 levels. As per market analyst Ali Martinez:
Bitcoin Transaction history shows that $BTC needs to reclaim $19,500 as support as soon as possible to avoid a downswing to $16,350.
However, if Bitcoin (BTC) manages to register a sustained close above $19,600, we can see a further bullish price action forming up to $22,000. It will be interesting to see what the market has to offer for the new week.
