Bitcoin plunge causes 40% of holders to suffer losses, Tesla loses nearly $200 million

Data shows that the price of Bitcoin has fallen 55% from its all-time high of $69,044 in November 2021. As of press time, the price of Bitcoin is $30,696, down 2.12% in the past 24 hours. Data from blockchain analysis company Glassnode shows that 40% of Bitcoin investment accounts are losing money.

Several established companies that added Bitcoin to their balance sheets began to incur losses, including Tesla, the market leader in premium electric vehicles.

Tesla invested $1.5 billion in Bitcoin on February 8, 2021, and said it had begun accepting it as a form of payment for Tesla vehicles. Tesla claims that this investment in Bitcoin is intended to diversify its sources of liquidity and gain flexibility.

But a few months later, in May 2021, Tesla said it would no longer accept Bitcoin as a means of payment, pointing out that minting Bitcoin would consume a lot of electricity and would be detrimental to environmental protection.

For a while, Tesla’s Bitcoin investment paid off, especially when the price hit an all-time high of $69,044.77 on November 10. But Bitcoin prices have since plummeted and are currently hovering around $31,000.

Today, the collapse in Bitcoin prices has put Tesla's initial investment into the red. According to Bitcoin Treasuries, the 43,200 Bitcoins that Tesla purchased for $1.5 billion are currently worth $1.32 billion, down $180 million, or about 15%.

MicroStrategy (MSTR), the company with the most Bitcoin on its balance sheet, also suffered losses. As of now, the company holds about 129,218 Bitcoins, with a total purchase price of about $3.97 billion, an average cost of about $30,700 per Bitcoin. Due to the decline in Bitcoin prices, which once fell below MicroStrategy's Bitcoin purchase cost, the company also suffered losses on its holdings.

MicroStrategy CEO Michael Saylor has long been a Bitcoin advocate. While being the largest Bitcoin holder among public companies comes with risks, Saylor shared his thoughts on how MicroStrategy can survive a severe bear market.

He wrote on Twitter that the company may release some additional collateral if the price of Bitcoin falls below $3,562.

The cryptocurrency market crashed and Bitcoin fluctuated around $30,700, which is roughly MicroStrategy ’s average cost per Bitcoin, but Saylor does not seem interested in selling the company’s Bitcoin anytime soon.

The current round of Bitcoin decline has fallen below the Bitcoin cost price of many institutions or companies. According to data from Bitcoin Treasuries, based on the Bitcoin price of $30,800, the Bitcoin currently held by 12 institutions or companies, including Tesla, is in a loss.

Meitu holds more than 940 bitcoins, with an average purchase price of about $52,610, and currently has a loss of about $20.7 million. Nexon purchased $100 million worth of bitcoins at the end of April, with an average cost of $58,226, and currently has a loss of nearly $47.4 million.

Other cryptocurrency stocks have also plummeted recently. Coinbase shares plunged 12% on Tuesday, and have fallen more than 65% so far this year. Robinhood shares have fallen more than 45% in 2022.

“Institutional investors are watching bitcoin closely because many who entered the market last year are now losing money,” said Edward Moya, an analyst at broker Oanda.