Tesla could have made more in profits from its recent bitcoin investment than it has made selling EVs, Yahoo! Financereported. When bitcoin hit the $50,000 mark for the first time ever, this continued the 2021 rally that has been sending it higher on increased adoption. Tesla purchased $1.5 billion in bitcoin last month, and even though it hasn’t revealed its average purchase price or how many bitcoins it holds, Tesla could be raking in the profits.
In January, Bitcoin traded between $29,333 and $37,202. Tesla’s big purchase could have ranged between 37,020 and 51,137 bitcoin, with an average coming out to be 44,079 bitcoin. With these numbers in mind, the article noted that the value of Tesla’s bitcoin is worth the following with the bitcoin price of $48,450 at the time of the Yahoo! Finance article being written:
- 51,137 Bitcoin: $2.48 billion, profit of $0.98 billion.
- 44,079 Bitcoin: $2.14 billion, profit of $0.64 billion.
- 37,020 Bitcoin: $1.79 billion, profit of $0.29 billion.
The price is actually up considerably since then, sitting at $57,744.80 right now. Using just that average estimate of 44,079 bitcoin, the total value would now be $2.545 billion, for a profit of more than $1 billion. Tesla’s financial gain on the bitcoin purchase could be more than Tesla has made from its entire business during the fiscal year of 2020, which was also the company’s first profitable year.
The article noted that Tesla’s purchase created validation of the cryptocurrency for some. It’s also been seen as a step forward for other publicly traded companies to make a similar move. On the other hand, it has also been criticized for that due to the very high electricity use of bitcoin mining. See the following for more discussion on that:
Tesla Is Different
Although the article pointed out why this was important, I wanted to build upon this with my own thoughts. Tesla is different. It didn’t come into the auto industry as just another automaker. Tesla has its own way of doing things and sets higher standards that legacy auto is failing to meet as they continue to trip over themselves trying.
Tesla is seen as the leader of an industry that was stale, and by adding bitcoin to its investments, Tesla is making a stand for a portion of the world that views crypto as the future of currency. We’ll see where that leads.