An analyst at Wedbush Securities, Daniel Ives, believes that Tesla has made about $1 billion in paper profits from the investment in Bitcoin. He declared that Tesla was “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020.”
In February 2021, Tesla revealed in an SEC filing that it had acquired $1.5 billion worth of bitcoin for “more flexibility to further diversify and maximize returns on our cash.”
The purchase was revealed to have been made in January, but it wasn’t disclosed exactly when or for what price. It is not known if Tesla has kept all of the crypto it bought.
Bitcoin has enjoyed a memorable rally in the last two months, regularly smashing through the previous ATHs. The previous week was especially notable since Bitcoin’s market value reached $1 trillion for the very first time. The King of Crypto is up 94% year-to-date.
“While the Bitcoin investment is a sideshow for Tesla, it’s clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months,” Ives commented.