Chris Bryant, Columnist

Elon Musk's Bitcoin Bet Is a Bean Counter's Nightmare

Tesla is taking a massive financial risk, but it should be allowed to record the value of its Bitcoin in its accounts at the current market price.

February 9, 2021 at 9:00 AM UTC

By Chris Bryant

Chris Bryant is a Bloomberg Opinion columnist covering industrial companies in Europe. Previously, he was a reporter for the Financial Times.

Financial dynamite.
Photographer: Pool/Getty Images Europe

Provide news feedback or report an error

Site feedback:

Take our Survey

This article is for subscribers only.

Elon Musk’s decision to invest $1.5 billion of Tesla Inc.’s cash in bitcoin is financial dynamite that unites two speculative bubbles. There’s plenty to suggest the move is inadvisable. Though small in the context of Tesla’s $830 billion market value, this is still a material portion of Tesla’s $19.4 billion cash reserves to park in such a volatile asset.

Tesla wouldn’t be the first car company to operate as a quasi hedge fund. For a time Porsche made tons of money trading derivatives, almost bankrupting itself in the process. Owning cryptocurrency sits badly with Musk’s green ethos: Some Bitcoins are mined with renewable power but the industry still leaves a sizeable carbon footprint.