Tesla’s bold investment in Bitcoin (BTC) in 2021 began to pay off when the price of BTC surpassed $ 58,000 on October 14.
Tesla currently owns 43,200 BTC, with a value of around $ 2.5 billion. Elon Musk’s company announced in February that it had bought $ 1.5 billion worth of Bitcoin. In other words, Tesla’s investment has gained 65 percent, or more than $ 1 billion, in the intervening time.
Tesla sold 10% of its Bitcoin savings in the second quarter of this year, at an average of $ 50,000. The company announced in its second quarter revenue report that it generated $ 128 million from these sales.
Bitcoin’s earnings exceeded its income
Tesla’s net profit from its cryptocurrency holdings exceeded its car sales revenue in the second quarter of the year.
Tesla announced that its cryptocurrency investment in the second quarter turned into a profit of $ 1.14 billion. The company reported net income of $ 1.14 billion for the same period, to be exact.
Tesla announced on October 1 that it sold 241,300 electric vehicles in the third quarter of the year. In the same quarter of last year, it sold 201,250 vehicles. Combined with the earnings from your investment in Bitcoin, expectations are high for the company’s earnings report, which will be announced on October 19 after the market closes.
“We believe the third quarter will be TSLA’s strongest,” said Piper Sandler analyst Alexander Potter.
Will other companies follow Tesla?
Tesla’s Bitcoin strategy has been quite successful so far, and it has featured case studies on how other companies can add BTC to their reserves as well.
On the other hand, some companies that invested in Bitcoin before Tesla made much higher profits.
Business intelligence firm MicroStrategy, for example, has intermittently bought a total of $ 3.5 billion worth of Bitcoin since last year. The profits of the company, which bought Bitcoin for the first time on August 11, 2020, almost doubled its investment, approaching $ 6.3 billion.
Jack Dorsey’s payment services company Square also received significant income from its investment in Bitcoin. The company’s investment, which invested $ 220 million in cryptocurrencies, reached a value of $ 442 million.
Canada-based cryptocurrency mining company Hut 8 Mining Corp also invested $ 39.3 million in Bitcoin. The value of the company’s investment increased by more than 600 percent to $ 250 million.