- Bitcoin has been experiencing a bearish trend for quite a few weeks.
- According to a prominent analyst at CNBC, Tesla’s downfall will record a loss of $100 million.
- This drop will compel Tesla to submit its drawdown statement to United State’s SEC.
Bitcoin is currently trading at $34,700, down by almost fifty percent from its all-time high of $63,729. This drop in the price of Bitcoin will result in a lot of damage to all the investors, the major entity being Elon Musk’s Tesla. Tesla has been a long supporter of BTC, has invested around $1.5 billion in cryptocurrency.
Bitcoin dropped down to the twenties and is now trying to claim the previous moving averages. Currently, Bitcoin is revisiting those areas which it has already crossed in the previous bull run. This is what might cause Tesla’s downfall in the second quarter of 2021.
Tesla’s Downfall in Q2
Kate Rooney, a major business analyst at CNBC, has made a statement saying that Bitcoin’s further dropping will lead to Tesla’s downfall and that it might start facing an “impairment charge.”
In such a case, Tesla will have to submit a report to the United States Securities and Exchange Commission stating the drawdown in the report. Tesla reported that the company had purchased BTC worth $1.5 billion in the month of February, resulting in Tesla’s downfall in this quarter.
Tesla holds Bitcoin as a digital asset that cannot be touched or seized as it doesn’t have a physical presence. Therefore, according to the rules set up by proper authorities, if the asset’s value falls below the cost where it was bought at or below the carry cost, the impairment cost will be liable to the organization.
According to the analyst, it could be that Tesla would lose somewhere around $25 to $100 million on paper, and for this reason, last night Elon Musk posted a Tweet that raised the price of Bitcoin, only to delete it later.