Tesla books Bitcoin mark-to-market loss as crypto prices fall

The decline reflects market-driven valuation changes rather than asset sales. Tesla reported that its “digital assets (gain) loss, net” swung to a $307 million loss in Q4, compared with an $80 million gain in Q3 and a $284 million gain in Q2, as crypto prices reversed earlier advances.

Bitcoin fell about 23.7% during the fourth quarter, closely tracking the 23% drop Tesla reported in the value of its digital assets over the same period. Tesla has not disclosed a new unit count for its holdings at year-end, but its most recent filing that included quantities showed the company holding 11,509 Bitcoin at the end of September, with an acquisition cost of $386 million. Tesla’s Q4 materials list only the fair value of digital assets and do not indicate any change in holdings, pointing to a static position through the quarter.

The accounting impact stems from Tesla’s adoption of the Financial Accounting Standards Board’s crypto standard, which requires certain digital assets to be measured at fair value with changes recognized in earnings each reporting period. As a result, both realized and unrealized movements in crypto prices now flow directly through Tesla’s income statement under “Other income (expense), net,” increasing quarter-to-quarter volatility even when no transactions occur onchain.

Tesla’s current exposure marks a sharp contrast with its earlier crypto strategy. The company entered Bitcoin in 2021 with a purchase of roughly 43,200 coins for about $1.7 billion, then reduced that position significantly in 2022 by selling approximately 75% of its holdings. Since then, Tesla has kept its remaining Bitcoin largely unchanged. The company also discontinued accepting Bitcoin for vehicle purchases after briefly enabling the option, citing environmental concerns tied to mining.

While the crypto revaluation weighed on reported results, Tesla’s core operations showed steadier performance. The company posted Q4 revenue of $24.9 billion and reported diluted non-GAAP earnings per share of $0.50 for the quarter, according to its update materials.

Tesla also disclosed a separate strategic allocation during the reporting period, agreeing to invest $2 billion to acquire shares in xAI, the artificial intelligence company founded by CEO Elon Musk, adding to its exposure beyond automotive, energy and digital assets.

Following the earnings release, Tesla shares were little changed in regular trading but moved higher in after-hours activity, as investors weighed stable operating metrics against continued volatility in crypto markets.