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SpaceX Reportedly Marks Down Bitcoin Holdings by $373 Million

2 mins
Updated by Kyle Baird
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In Brief

  • SpaceX, led by Elon Musk, reportedly secured slight profit in Q1 2023 after writing off losses in 2021 and 2022.
  • Uncertainty arises over whether SpaceX sold all its Bitcoin, having reduced its value by $373 million.
  • Accounting rules dictate that once written down, the value of Bitcoin can't be adjusted upwards, even if price rises.
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Reportedly, SpaceX reduced the value of its Bitcoin by a total of $373 million and potentially liquidated all of its holdings.

The Elon Musk-led firm bounces back from 2021 and 2021 annual losses, reportedly achieving a slight Q1 2023 profit.

SpaceX Financial Statements Raise Questions About Bitcoin Holdings

The Wall Street Journal’s report on Aug. 17, which looked at the company’s financial statements, leaves uncertainty if SpaceX actually sold all of its Bitcoin:

“SpaceX wrote down the value of bitcoin it owns by a total of $373 million last year and in 2021 and has sold the cryptocurrency.”

To learn more about where to buy Bitcoin, read BeInCrypto’s guide: 4 Best Crypto Brokers for Buying and Selling Bitcoin in 2023

However, Big Four Accounting Firm Deloitte declares that, typically, the accounting treatment for Bitcoin involves considering it as an “indefinite-lived intangible asset.” It states to account for Bitcoin at cost and then make adjustments if the price decreases.

Should the value of Bitcoin decline, the company must report a write-down in its books, referred to as impairment charges.

Bitcoin Price Chart 1 Month. Source: BeInCrypto
Bitcoin Price Chart 1 Month. Source: BeInCrypto

After recording a decrease, the asset’s value on the balance sheet cannot be “written up.” This rule applies to any subsequent Bitcoin price increase or rebound.

In the fourth quarter of 2022, Tesla, which Musk also leads and holds a significant stake, revised down its Bitcoin holdings’ value due to a decline since its purchase. The company reported $34 million in impairment charges, while its overall holdings were assessed at $184 million.

Since June 2021, Tesla has consistently disclosed impairment losses in consecutive quarters.

Bitcoin Not Musk’s Favorite Crypto

While Musk’s companies might possess substantial holdings in Bitcoin, he often alludes to Dogecoin as his favored crypto.

Dogecoin Price Chart 1 Month. Source: BeInCrypto
Dogecoin Price Chart 1 Month. Source: BeInCrypto

On May 24, Musk voiced his preference for Dogecoin as his favorite crypto simply because it “has the best humor and it has dogs.”

Musk made it clear that he did not intend to provide any financial advice:

“I’m not advising anyone to buy crypto or bet the farm on Dogecoin or anything like that.”

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.
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