Tesla’s Bitcoin (BTC) Buy Now at $1 Billion in Paper Profits


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Tesla’s Bitcoin (BTC) bet has almost recouped the initial capital in profits barely a fortnight after the electric vehicle (EV) manufacturing giant announced its $1.5 billion BTC outlay. Indeed, the company could be in line to make more profits from adding Bitcoin to its balance sheet than from its entire inventory sale for the whole of 2020.

Tesla Enjoying Bitcoin Pump

According to a report by CNBC on Monday (Feb. 22, 2021), Daniel Ives, a Wedbush Securities analyst has calculated that Tesla has made $1 billion in profit from its Bitcoin acquisition. As previously reported by BTCManager, Tesla announced a $1.5 billion BTC outlay earlier in February.

In an investment note published by Ives on Sunday, the Wedbush analyst remarked that Tesla was on course to earn more in profits from its Bitcoin investment than from the EV sales recorded in 2020. Indeed, since announcing its Bitcoin acquisition back on Feb. 8, BTC has gained over 65 percent which would put the company’s profit at about $975 million.

Ives’s analysis probably includes Sunday’s intra-day high above the $58,000 mark which may account for the analyst’s higher profit valuation. As of the time of writing, BTC has retraced below the $55,000 mark but the market sentiment is still high for a push above the $60,000 mark.

Apart from its Bitcoin investment, Tesla also revealed plans at the time to accept the largest cryptocurrency by market capitalization as a payment method for its cars. This move could even mean that the company is in line to expand its BTC stash since Tesla hinted that it may not liquidate the Bitcoin payments upon receipt.

More Corporate Interest to Follow?

Tesla’s $1.5 billion Bitcoin bet came shortly after reports emerged of the company’s CEO Elon Musk asking MicroStrategy’s CEO Michael Saylor about ways to convert the EV giant’s balance sheet to Bitcoin. At the time, Saylor, whose company holds more than 70,000 BTC was in the middle of onboarding more corporate interest into Bitcoin.

Commenting on the Tesla Bitcoin investment, Ives noted:

“While the Bitcoin investment is a side show 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.”

However, amid the growing clamor for more publicly-listed firms to hold Bitcoin, tech giant Microsoft has come out to say that it has no plans to emulate Tesla and MicroStrategy.

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