SpaceX reduced the value of Bitcoin on its balance sheet by $373 million last year and in 2021. Tesla also offloaded Bitcoin last year.
While the sale of Tesla’s Bitcoin (BTC) is in the public domain, details surrounding SpaceX’s holdings only emerged after a rare inside look into the private corporation’s financials.
Selling off crypto
Documents seen by The Wall Street Journal offer a rare look inside the inner financial workings of SpaceX. The documents reveal that SpaceX made a small profit in the first three months of the year after two successive annual losses. SpaceX made $55 million in profit on $1.5 billion in revenue in the first quarter of 2023.
The documents also offered insight into the state of the company’s Bitcoin reserves (or lack thereof).
“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,” the WSJ reported on Thursday, August 17.
The report offers the first update on the status of Bitcoin at SpaceX in years. In a conversation with Jack Dorsey in 2021, Musk announced that he held both Bitcoin and Ethereum and further revealed that SpaceX held Bitcoin in its treasury.
It is believed that SpaceX held major amounts of BTC at one time, but keeping track of the company’s Bitcoin holdings is a challenging task because Elon Musk’s space exploration company is privately held. This means its financials are also private, in contrast to publicly listed companies.
Reports on the amount of Bitcoin that SpaceX holds are infrequent at best. Tesla is publicly listed and it is much easier to track. In July of 2022, Tesla announced it sold $936 million of the largest digital asset by market capitalization.
The company now holds around $180 million in Bitcoin, a fraction of what it once held. Although Tesla shed significant holdings around the same time as SpaceX, it and hasn’t bought or sold the cryptocurrency in a year.
Bitcoin price drops
The market appeared to react poorly to the news SpaceX no longer holds Bitcoin. On Thursday, August 17, BTC fell from $28,648.98 to $26,226.26, representing a 9% drop.
The price fell below the $26,000 mark on Friday, August 19, and is now at $26,179.49. Despite the correlation, not every commentator believed that the lost value could be attributed to SpaceX.
Michael Safai, partner at quantitative trading firm Dexterity Capital, was among those to take a contrarian view.
“There aren’t enough good headlines coming out of crypto to get people excited,” Safai told Bloomberg. “Conversely, rising interest rates and weakened risk appetite are pushing non-crypto-native traders towards safer assets.”
Shilian Tang, chief investment officer at crypto investment firm LedgerPrime, also weighed in on the issue.
“There was optimism earlier in the week that a resolution to the Grayscale Bitcoin ETF would come this week but that passed with nothing coming out,” said Tang, who went on to point out that traditional markets had also had a rough time recently.