Elon Musk’s Tesla is facing a $440m (£363.5m) writedown on its Bitcoin holdings

Tesla purchased $1.5bn worth of Bitcoin in an unprecedented move last year, making it the largest company to convert part of its cash into cryptocurrency.

However, the bet by the carmaker has been heavily lost as Bitcoin crashed to an 18-month low.

On Thursday, the last day of Tesla’s second-quarter financial quarter, Bitcoin was traded at $19,000. This made the investment by the company worth $820.8m.

Three months ago, the company valued its Bitcoin at $1.26bn. Despite the fact that the holdings were close to $2bn in market value, the accounting practices of the company mean that the company doesn’t register gains until it sells.

This means that Tesla will likely record an impairment of its Bitcoin holdings of approximately $440m, 9pc of its annual profits last year. It reports its quarterly results later in the month.

The price of the cryptocurrency has dropped by 60 percent from $46,700 at its beginning and nearly 75 percent from its all-time high in November. Inflation and rising interest rates have slowed down interest in digital assets, while prices have been hit hard by a string of crises at cryptocurrency firms.

Tesla briefly accepted Bitcoin last year as a payment method, but then suspended it after Musk raised concerns over its carbon footprint. This year, the world’s wealthiest person stated that he has not sold any of his cryptocurrency investments.

Many companies, including Jack Dorsey’s Block and Coinbase, that converted part of their cash to Bitcoin have been affected by the slump in digital currency. This year, cryptocurrency markets have been decimated by $1.3 trillion.

Musk stated that Tesla must reduce around 10% of its salaried workforce, as the company’s newly opened factories in Berlin & Texas burn huge amounts of cash. The Tesla chief executive also predicts a US recession.

This year, the company lost 44 percent of its value due to a widespread sell-off. It also has struggled with demand partly because Shanghai locked down its plant.

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