SpaceX’s $1.4 billion Bitcoin hoard is a strategic reserve—and an accounting headache

When Space X filed for its much-hyped IPO, investors learned that the size of its Bitcoin hoard exceeded previous estimates. When the company finally does go public, it’s an open question what the firm helmed by Elon Musk, who has recently cooled on his longtime crypto fervor, will do with that stash, which is currently worth nearly $1.4 billion. The situation is not entirely unprecedented. Tesla, another Musk-owned company that went public, still has a Bitcoin stockpile that it has held since 2021. But SpaceX’s 18,712 Bitcoin is substantially more than the 11,509 that Tesla now holds. In the case of Tesla, the company sold a large chunk of its initial Bitcoin purchases in 2022, and there are reports suggesting that SpaceX has sold some of its holdings as well. Still, it doesn’t seem to be the case that a newly-public SpaceX is likely to sell its Bitcoin—at least in the short term. “Could SpaceX sell its Bitcoin as a public company? Certainly, but it would likely take a major strategic shift or a genuine liquidity crisis, not routine treasury management. Like Tesla, SpaceX seems to treat Bitcoin as a long-term reserve asset, not a trading vehicle,” David Krause, a finance professor emeritus at Marquette University, told Fortune. Until SpaceX’s S-1 filing came out, blockchain sleuths believed the company held around 8,300 Bitcoin. The filing showed SpaceX held roughly $1.4 billion of the currency that was acquired at a cost basis of $661 million, meaning that its Bitcoin investment has more than doubled. It also means that SpaceX’s Bitcoin is worth around 1.8% of the company’s total asset base, based on the balance sheet it filed with the SEC. Given its smaller size compared to SpaceX’s cash and securities holdings, the company may view the asset as a kind of hedge. “What we do know from the filing is that they haven’t been sellers since I think the end of 2024, Bloomberg Technology co-host Edward Ludlow said in an interview on Bloomberg Crypto. “The idea,