Tesla’s bitcoin gambit already made $ 1 billion, more than 2020 earnings from car sales, analyst estimates

Much has been made of the considerable sum that Tesla Inc. has invested in bitcoin, a speculative asset that has only been around since 2009.

Read: Why did Tesla buy bitcoins?

However, early estimates by prominent tech analyst Dan Ives see that the electric vehicle maker’s investment, spearheaded by CEO Elon Musk, is already generating a profit on digital paper of at least $ 1 billion, as the Asset price soars to records. .

“Based on our calculations, we estimate that Tesla has so far made approximately $ 1 billion in profit over the last month … To put this in perspective, Tesla is on a trajectory to do more with its investments in Bitcoin than the profits from the selling your [electric vehicle] cars throughout 2020, ”wrote the prolific Wedbush analyst Dan Ives in a note published Saturday afternoon.

Earlier this month, Tesla Inc. TSLA,
became the last and best known major corporation to participate in bitcoin, underscoring the growing acceptability of crypto. The Palo Alto, California-based company on February 8, in a public filing said it bought $ 1.5 billion of bitcoin BTCUSD,
+ 2.31%
and that he hopes to start accepting payments in cryptocurrency for his products in the future.

Tesla’s decision to invest in bitcoin was seen as further confirmation of the legitimacy of the nascent asset that did not exist until about 12 years ago.

On Friday, bitcoin’s price soared to a record high around $ 54,000 and surpassed a total market valuation of $ 1 trillion, further reinforcing the perception of crypto as a legitimate asset, if not a fledgling one.

Check out: Is Bitcoin heading to $ 100,000 in 2021 or is its price ‘unsustainable’?

On Saturday, a single bitcoin extended its gain to a record $ 57,492, according to CoinDesk. Bitcoin prices have risen more than 90% so far in 2021, according to data from FactSet. In comparison, gold GC00,
+ 0.32%,
considered a rival to bitcoin, it is down about 6% in 2021. Meanwhile, the Dow Jones Industrial Average DJIA,
+ 0.00%
has gained nearly 3% so far this year, the S&P 500 SPX Index,
is up about 4% and the Nasdaq Composite Index COMP,
+ 0.07%
it has advanced 7.7% during the same period.

Tesla shares, by the way, have risen more than 11% since the beginning of the year.

The Wedbush analyst said it’s unclear whether Tesla’s bitcoin move is a gimmick, aligned with Musk’s perception as an iconoclast, but he still thinks other corporations are likely to be forced to follow suit and switch parts of your cash for bitcoins in the future.

“We still expect less than 5% of public companies to go this route until more regulatory targets are set in the crypto market, which is clearly starting to gain more widespread adoption in 2021 and we believe it will have a seismic impact for blockchain, payments, banks and semis in the next few years, “wrote Ives.


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