Better to sell cars than stir-fry coins?Tesla finally blew it, but it exploded in China, doubling its revenue in the last two years

2022-06-11 0 By

Elon Musk, the world’s richest man who founded Tesla, has revealed that his company lost an estimated $101 million in 2021 due to the depreciation of bitcoin, according to its latest annual report released on February 7.After peaking at $67,000 a coin in early November, the price of bitcoin fell sharply to $47,000 as of December 31, when Tesla still held $1.99 billion worth of bitcoin.Tesla explained in its annual report that it believes digital assets such as bitcoin have long-term potential as an investment and alternative to cash, allowing it to increase or decrease its holdings at any time in line with market trends and business development needs.However, the annual report also acknowledged that bitcoin and other digital assets have indeed been affected by market price fluctuations, and have caused damage to the company’s interests, and will adjust the investment strategy in the future to meet the risks and challenges.Tesla’s loss due to the drop in the price of Bitcoin has attracted a lot of attention, even though tesla’s $101 million loss is barely worth the $5.519 billion profit it made in 2021.But as a pioneer of electric cars and digital assets, the knock-on effects of Tesla’s or Musk’s bungle of money could be bigger than expected.Digital assets, after all, have had a unique development story, going from nobody to millions of dollars, with more room to appreciate than any other investment product before them.It is this particular experience that gives digital assets their highly speculative properties.In fact, the rise of Bitcoin, and other digital currencies, is closely related to Tesla’s announcement that it was the first to accept bitcoin as payment, and Musk’s own advocacy.If Tesla were to abandon bitcoin for some reason, it would probably start a new wave of negative sentiment against bitcoin, with serious consequences.It’s worth noting that bitcoin’s recent downward trend has continued, with the price falling as low as $35,000 a coin in January, the lowest since July last year, on factors such as the potential end of quantitative easing by the Federal Reserve.For this reason, UK regulators have issued warnings to investors to be fully aware of regulations governing cryptocurrencies, while the European Union and the Russian Central bank have directly called for a ban on cryptocurrencies or “mining”.As a result, many experts believe that cryptocurrencies, such as Bitcoin, could quickly collapse as regulation becomes more stringent.At the same time, Tesla’s domestic revenue is surging.According to its annual report, Tesla generated about $13.8 billion in revenue in the mainland market in 2021, up from $6.6 billion in 2020 and $2.9 billion in 2019.In other words, Tesla’s revenue has more than quadrupled in nearly two years, doubling on average every year.The most critical thing is that the overall gross margin of Tesla’s auto business has risen to 29.3% in 2021, several times higher than that of traditional auto companies, which means that the voice of auto business in Tesla will be further expanded.Some analysts say that the boom in the new-energy vehicle market will allow tech companies such as Tesla to taste the benefits of manufacturing and give up speculating on virtual assets such as cryptocurrency.Tesla’s $100 million-plus loss could be the start of an avalanche in the cryptocurrency space.