This means Tesla is likely to record an impairment on its Bitcoin holdings of around $440m – equivalent to 9pc of its annual profit last year – when it reports quarterly results later this month.
The cryptocurrency’s price has fallen by 60pc from $46,700 at the start of the year and almost 75pc from an all time high in November. Rising interest rates and inflation have dulled interest in digital assets while prices have also been hit by a series of crises at cryptocurrency companies.
Tesla briefly accepted Bitcoin as a payment method last year but suspended its use after Mr Musk raised concerns about its carbon footprint. The world’s richest person said earlier this year that he had not personally sold any of his cryptocurrency investments.
A number of companies that have converted parts of their cash reserves to Bitcoin, such as Jack Dorsey’s Block, Coinbase and the software company MicroStrategy have suffered as the digital currency slumps. Around $1.3 trillion in total has been wiped off cryptocurrency markets this year.
Mr Musk has said Tesla needs to cut around 10pc of its salaried workforce as its newly opened factories in Berlin and Texas burn through huge sums of cash and the Tesla chief executive predicts an imminent US recession.
The company has lost 44pc of its value this year amid a widespread sell-off and as it has struggled to match demand, partly due to Shanghai’s lockdown closing the company’s plant there.
