[Bitcoin Now] Amazon Denies Allowing Bitcoin Payments... Drops to 43 Million Won Range

Tesla Suffers Approximately $23 Million Investment Loss Due to Bitcoin Price Plunge

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] Bitcoin, the representative cryptocurrency that had risen to the 46 million KRW range, has dropped to the 43 million KRW range. This decline is interpreted as a result of the global IT company Amazon officially denying reports that it would launch Bitcoin payment services within the year.

On the 26th (local time), according to the US economic media Bloomberg, an Amazon spokesperson stated in a press release, "Amazon does not plan to accept Bitcoin as a payment method within this year," officially denying related rumors. The rumor that Amazon would launch Bitcoin payment services began circulating on the 23rd after Amazon started recruiting experts in digital currency and blockchain. The US economic media CNBC also interpreted this as Amazon seriously considering entering the cryptocurrency market.

Following this, the price of Bitcoin plunged. According to the domestic cryptocurrency exchange Upbit, as of 2:55 PM on the 27th, Bitcoin recorded 43.15 million KRW, up 0.35% compared to the previous day. It had risen to 46.8 million KRW at 4:23 AM that day but fell by more than 3 million KRW in less than a day. At 12:04 PM, it even dropped to 42.05 million KRW.

Meanwhile, Tesla appears to be experiencing investment losses due to the sharp drop in Bitcoin prices. According to CNBC on the 26th, Tesla announced in its Q2 earnings report that it incurred approximately 23 million USD (about 26.4592 billion KRW) in Bitcoin investment losses. Tesla, which purchased Bitcoin worth 1.5 billion USD in February, had reported a profit of about 101 million USD in its Q1 earnings report, but this turned into a loss within one quarter. Bitcoin reached an all-time high of 81.99 million KRW in April but has since fallen about 47%.

Tesla’s Bitcoin investment loss was recognized as a loss on its accounting books. Cryptocurrencies like Bitcoin are classified as intangible assets under US accounting standards, and if their market price falls below the purchase price, the loss must be recognized as an impairment loss. Impairment losses are recorded as non-operating expenses, reducing net income. However, if the Bitcoin price is higher than the purchase price, it cannot be reflected in the books unless sold to realize the profit. CNBC reported that despite the impairment loss from Bitcoin investment, Tesla’s Q2 operating profit increased fourfold compared to the same period last year, reaching 1.3 billion USD.