Public companies like Tesla have invested billions in crypto, and they're hurting ��������������������

Crypto Weekly

Over the last few months, Bitcoin's value has plummeted spectacularly, down around $1.4 trillion since hitting an all-time high last November. CoinGecko estimates that public companies have suffered losses of almost $7 billion in the crypto market. Individual traders have sold, lost, sulked, and bought again.

A recent swoon in cryptocurrency has left many major companies red-faced, even though Bitcoin became an increasingly popular hedge against inflation in 2021. Quartz previously reported that 27 publicly traded companies hold Bitcoin on their balance sheets, putting the volatile digital currency where reliable assets typically reside. Recently, the hedge hasn't performed well.

Publicly traded companies own approximately 78% of all Bitcoins.

Quartz previously reported that 27 publicly traded companies hold Bitcoin on their balance sheets, putting the volatile digital currency where reliable assets typically reside. Recently, the hedge hasn't performed well

Around 169,000 Bitcoin are collectively held by Tesla and MicroStrategy, two publicly traded companies. MicroStrategy alone holds 121,000 Bitcoins, which are equivalent to $3.5 billion.

MicroStrategy has been taking a massive gamble on Bitcoin for months, building up its crypto reserve unapologetically. Saylor frequently defends and praises the digital currency on Twitter, where he is the founder and CEO of the company. According to Business Insider, Taylor owns at least $866 million in Bitcoin.

Despite the crypto carnage, MicroStrategy does not intend to turn its back on Bitcoin. Last week, MicroStrategy CFO Phong Le told the Wall Street Journal that the company has a buy-and-hold strategy for Bitcoin. If the company has excess cash or finds other ways to raise money, it will continue to invest in the cryptocurrency. Fortune contacted

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According to Nexon CEO Owen Mahoney in a statement, "Bitcoin offers long-term stability and liquidity while preserving cash value for investment purposes."

MicroStrategy, but the company did not immediately respond.

As for crypto holdings, Tesla has remained committed. It holds $1.26 billion of Bitcoins and has not sold any during this year's "crypto winter," according to its Q4 earnings report published on Wednesday. Tesla made headlines earlier this year by announcing it would accept Bitcoins as payment for its products before rescinding the announcement following criticism about the energy consumption of Bitcoin mining. Tesla has yet to resume accepting Bitcoin payments. Square (8,027 Bitcoins), Coinbase (4,483 Bitcoins), and Nexon (1,717 Bitcoins) were among the companies affected by the cryptocurrency downturn.

MicroStrategy, for example, began storing assets using cryptocurrency, believing that Bitcoin would be a safer long-term investment than the U.S. dollar. In their August 2020 statement, MicroStrategy stated that cryptocurrency would provide a reasonable hedge against inflation and provide a higher return than other investments. Companies, however, refuse to purchase cryptocurrencies because they are concerned about the volatility of digital currencies. "In general, we are interested in safety and liquidity for our businesses, so Bitcoin is still too volatile and still too speculative for us to use as a currency," PepsiCo CFO Hugh Johnston told CNBC SquawkBox last October. Jack Dorsey, former Twitter CEO and a cryptocurrency advocate runs Square, which holds significant crypto holdings. The company announced it wouldn't be making any new cryptocurrency investments after it lost $20 million on a $220 million investment in cryptocurrencies.

In March, Sheryl Estrada of Fortune reported that Square CFO Amrita Ahuja believes "every balance sheet should have Bitcoin on it."

If companies want to invest in crypto, they need to make smart choices. Tesla and MicroStrategy invested in Bitcoin when the coin's price was relatively low. Other companies weren't as lucky.

In May of last year, Square made a big investment in Bitcoin, just before the currency plunged precipitously from a high of nearly $60,000 to a low of around $30,000, where it stayed for several months. Nexon, another company that lost a lot of money on crypto, invested $100 million in April 2021, around a month before Bitcoin's collapse. According to Nexon CEO Owen Mahoney in a statement, "Bitcoin offers long-term stability and liquidity while preserving cash value for investment purposes." 