Balance Sheet Update: Grayscale to increase holdings of $1 billion in GBTC, Tesla unchanged in holdings, recognizes $50 million in losses

Since MicroStrategy announced the inclusion of Bitcoin on its balance sheet last year, many companies have followed suit. As the earnings season approaches, there have been changes in the balance sheets of various companies. Grayscale's parent company announced on 10/20 that it is once again increasing the holding limit of GBTC, while analytical firm Chainalysis announced buying Bitcoin. Tesla's holdings remain unchanged.

DCG Increases GBTC Holdings by One Billion Dollars

Grayscale's parent company, Digital Currency Group (DCG), has announced plans to increase the GBTC holdings limit to one billion dollars, with approximately 388 million dollars of GBTC purchased as of October 19th. Since the end of February this year, Grayscale's GBTC has been consistently trading at a discount. DCG may have decided to use its own cash reserves to support GBTC and continues to increase the holdings limit:

• 3/10: Announced the allocation of cash reserves to GBTC, with a limit of 250 million dollars
• 5/3: Announced an increase to 750 million dollars
• 10/20: Announced an increase to one billion dollars

The first Bitcoin futures ETF in the U.S. has recently been launched, but has faced criticism due to its nature as a "futures" product. The community generally believes that holding GBTC for the long term has lower costs. However, despite this, the discount on GBTC has not improved, and the timeline for the submission of a spot ETF remains uncertain.

Following DCG's increase in the limit, the GBTC discount has improved from -20.53% on 10/19 to the current -15.27%.

Tesla's Holdings Remain Unchanged

According to Tesla's third-quarter financial report, its net income of 20.93 billion dollars is a historical best. Tesla claimed in the first quarter to "prove sufficient liquidity of Bitcoin" and sold about 10% of its Bitcoin holdings; in the second quarter, no sales were made but recognized a loss of 23 million dollars, and in the third quarter, a loss of 51 million dollars was recognized.

According to generally accepted accounting principles, the value of Bitcoin in the financial statements is recorded at the lowest price of the quarter. Therefore, the recognition of losses occurred in the second and third quarters.

It is unclear which day's price Tesla used as the basis, but according to Coinbase prices, the lowest "closing price" of Bitcoin in the second quarter was 31,594 dollars on 6/25; in the third quarter, it was 29,796 dollars on 7/20, making the recognition of losses in the third quarter higher than the second quarter.

Chainalysis Announces Purchase of Bitcoin

According to the official announcement, blockchain analysis firm Chainalysis, through the New York Digital Investment Group (NYDIG), has included an undisclosed amount of Bitcoin on its balance sheet. Chainalysis CEO Michael Gronager stated:

This is Chainalysis' first purchase of cryptocurrency, and we will continue to seek other digital assets as potential investment targets in the future.