SpaceX’s $1.4 billion Bitcoin stash serves as a strategic reserve—yet poses an accounting challenge.

(SeaPRwire) –   Investors learned upon SpaceX’s highly anticipated IPO filing that its Bitcoin holdings surpassed earlier estimations. It remains uncertain what the company, led by Elon Musk, who has recently tempered his long-standing enthusiasm for cryptocurrency, will do with this stash, currently valued at nearly $1.4 billion, once it goes public.

This scenario is not entirely without precedent. Tesla, another company owned by Musk that has gone public, still possesses a Bitcoin reserve acquired in 2021. However, SpaceX’s 18,712 Bitcoin significantly exceeds Tesla’s current holdings of 11,509.

While Tesla divested a substantial portion of its initial Bitcoin purchases in 2022, and reports suggest SpaceX has also sold some of its holdings, it appears unlikely that a newly public SpaceX would liquidate its Bitcoin, at least in the immediate future.

“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 .

Prior to SpaceX’s S-1 filing, blockchain observers estimated the company held approximately 8,300 Bitcoin. The filing revealed that SpaceX held roughly $1.4 billion worth of the cryptocurrency, acquired at a cost basis of $661 million, indicating its Bitcoin investment has more than doubled. Based on the balance sheet submitted to the SEC, SpaceX’s Bitcoin holdings represent about 1.8% of the company’s total assets. Given its relatively smaller size compared to SpaceX’s cash and securities, the company may consider this asset a form 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, probably based on the language in the filing, is that … They might just see it as a hedge against inflation, long-term asset, but most likely this sort of strategic reserve for its excess cash.”

From a corporate accounting standpoint, the significant price volatility associated with Bitcoin is likely a more pertinent consideration.

“The real story for public investors isn’t whether SpaceX sells or holds. It’s the accounting volatility. Marking $1.45 billion in Bitcoin to market each quarter can produce wild swings into reported earnings that have nothing to do with rocket launches or satellite performance,” Krause said.

‘A lot more than I thought they had’

The substantial Bitcoin reserves held by both Tesla and SpaceX can be largely attributed to CEO Elon Musk’s personal affinity for cryptocurrency. The billionaire was particularly engaged with crypto during the 2021 bull market, frequently tweeting about Dogecoin and, for a period, accepting Bitcoin for vehicle purchases.

In recent years, Musk has spoken less publicly about cryptocurrency, coinciding with his companies’ sales of some of their holdings. During his lawsuit trial against OpenAI, Musk acknowledged that some cryptocurrencies possess merit, though he characterized most as scams. Nevertheless, the disclosure of SpaceX’s Bitcoin holdings demonstrated that Musk’s companies have a greater exposure to the currency than previously understood.

“It’s a lot more than I thought they had (like everyone else),” Bloomberg analyst James Seyffart told in a text. Despite Musk’s apparent waning interest in crypto, Seyffart noted, “he and/or someone higher up in his close circle are obviously strong believers in bitcoin to buy and hold through all this volatility.”

Following its IPO, SpaceX will rank as the seventh-largest public company based on its Bitcoin holdings. Should SpaceX and Tesla merge without liquidating any Bitcoin, the combined entity would become the fifth-largest public company by Bitcoin holdings.