Tesla already has a unrealized profit of $ 1 billion from holding Bitcoin

Tesla’s bold entry into the BTC market paid off in 2021 as the price of BTC rose in October and reached more than $ 58,000 on October 14.

Profit 1 billion

According to online monitoring source BTC Treasuries Tesla currently holds about 43,200 BTC, which at today’s prices is worth about $ 2.5 billion. That’s about 65%, $ 1 billion more than the carmaker paid in February, when Elon Musk revealed that it had added $ 1.5 billion to its BTC balance sheet.

In the second quarter, Tesla sold 10% of its stake in BTC, approximately 46,000 BTC, at an alleged average price of approximately $ 50,000 per coin. In its Q2 results report, the company announced that it had recognized $ 128 million in sales of Bitcoin.

Tesla made the first billion profits from car sales in the second quarter

After the latest rebound in the price of BTC, Tesla’s net profit from holding cryptocurrencies was the same as its income in Q2.

In more detail, Tesla reported a net profit of $ 1.14 billion in the second quarter, the first time it has exceeded $ 1 billion. This revenue was part of the $ 11.96 billion in revenue that Tesla received mainly from car sales, or about $ 10.21 billion. The remaining $ 354 million came from the sale of regulatory credits.

On October 1, Tesla announced that it delivered 241,300 electric cars in the third quarter, compared to 201,250 in the previous quarter. Combined with Tesla’s BTC profits, expectations of the spectacular results to be announced after the market closes on October 19 are high.

“We think Q3 will be the strongest TSLA quarter in history,”

– said Alexander Potter, an analyst at Piper Sandler.

Will other companies follow?

Tesla’s BTC strategy has been very successful so far and provides a case study of how other companies could replace part of their cash reserves with BTC.

Nevertheless, several companies that invested in BTC before Tesla made even greater profits.

For example, MicroStrategy, a business intelligence company, has purchased BTC worth approximately $ 3.15 billion in several rounds. With the first purchase, dated August 11, 2020, the company’s net profits from BTC are now approaching $ 6.3 billion, almost double its investment.

Square, Jack Dorsey’s payment services company, now values ​​more than $ 442 million from an investment of $ 220 million from BTC.

In addition, Canadian cryptocurrency mining company Hut 8 Mining Corp. saw an increase in the value of its $ 39.3 million purchase of BTC by more than 600% to about $ 250 million. As early as June, the company also unveiled plans to hold 5,000 BTC by 2022.

Conclusion

It is beautiful to see the numbers grow and it is certain that it will be a thorn in the side. However, the strategy with BTC pays off.