Bitcoin mining firms sustain profits despite BTC dropping below $22K — Tesla, MicroStrategy lose billions

Key Takeaways:

  • The fall in Bitcoin prices has resulted in Microstrategy and Tesla losing billions of dollars.
  • However, mining companies remain seemingly immune to the fall in prices.
Bitcoin's falling prices have cost leading companies billions of dollars
Bitcoin’s falling prices have cost leading companies billions of dollars. Image from freepik

NEW DELHI (CoinChapter.com) — Bitcoin mining firms remained in profit despite BTC’s prices dropping to $21,000 for the first time since Dec 2020. On the other hand, giants like Tesla and Microstrategy suffered losses to the tune of nearly $1.5 billion.

Macro global cues combined with the U.S. CPI numbers and the resulting FUD over the Federal Reserve’s policy in the future provided headwinds to BTC’s price action.

Moreover, news of Celsius Network suspending user withdrawals and transfers introduced fears of another Terra-esque situation in the market. As a result, investor sentiments further soured, resulting in BTC prices logging their highest single-day loss since Mar 12, 2020, on Monday.

Bitcoin prices fell to $21,000 on Monday
Bitcoin prices fell to $21,000 on Monday. Source: Tradingview.com

Despite Bitcoin prices in freefall and the rising Bitcoin mining difficulty, Bitcoin mining firms remain profitable. Bitfarms Limited’s profit is nearly 3.5 times, with its current BTC holdings (6,075 BTC) worth nearly $135 million.

Also Read: Bitcoin (BTC) set to fall below $20K this week on Fed’s 0.75% rate hike FUD.

Cypherpunk Holdings, a Toronto-based crypto investment firm, also reported gains of nearly 200%. The firm’s total stash of 401 BTC currently has a value of nearly $9 million ($8,912,666).

In addition, DigitalX, which claims to be the “world’s first publiclylisted blockchain technology company,” saw its Bitcoin holdings rise to nearly $4.8 million ($4,778,612), nearly five times the cost of acquiring the 215 BTC it owns.

One probable reason behind mining companies maintaining a profit amidst the crypto market bloodbath might be that the firms acquired their BTC before the leading cryptocurrency’s price started rising.

Bitcoin Bear Market A Sling To Crypto Goliaths

Meanwhile, two of the largest holders of BTC- Microstrategy and Tesla- have lost significantly in the ongoing bear market.

Microstrategy doled out nearly $4 billion ($3,965,863,658) for its stash of nearly 129,218 BTC. At present, the fall in BTC prices pared Microstrategy’s gains, with the firm’s Bitcoin costing nearly $2.8 billion ($2,872,012,190).

As such, Microstrategy is currently facing losses of nearly $1.1 billion ($1,093,851,468).

Microstrategy and Tesla lost billions as BTC prices plummeted
Microstrategy and Tesla lost billions as BTC prices plummeted. Source: Bitcoin Treasuries

In addition, Elon Musk’s Tesla, which bought 43,200 BTC at a total value of $1.5 billion, saw its BTC holding value drop to just under $1 billion ($960,167,520) a loss of more than $530 million ($539,832,480).

The two “goliaths” lost nearly more than $1.6 billion between them.

Also Read: Bitcoin (BTC) price plunges below $25K following headwinds from growing inflation — what’s ahead?

Furthermore, Microstrategy might have to top up a loan if BTC prices reach $21,000. The firm had previously shared that the Bitcoin-collateralized $205,000,000, which needs $410 million as collateral if BTC prices reach $21,000.

If the market continues to react negatively to the fallout from Celsius’s lack of liquidity, Microstrategy would likely be facing more severe losses.

At the time of writing, BTC was trading at $22,240, down 0.94% on the day.

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Bitcoin, Bitcoin mining firms sustain profits despite BTC dropping below $22K — Tesla, MicroStrategy lose billions

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