Tesla’s bold foray into the BTC market paid off in 2021 when Bitcoin price rebounded in October to hit above $ 58,000 on October 14.
Tesla’s BTC holdings are now worth more than $ 1 billion
Tesla currently holds about 43,200 BTC worth $ 2.5 billion at current prices, Bitcoin Treasuries said. That’s about 65%, or $ 1 billion, higher than what the automaker paid in February when the company announced it added $ 1.5 billion worth of BTC to its balance sheet.
Daily BTC / USD Price Chart | Source: TradingView
In the second quarter, Tesla sold 10% of its Bitcoin holdings – around 46,000 BTC – for a reported average price of $ 50,000. In its earnings report for the second quarter, the company announced that it had made a profit of $ 128 million from the sale of its bitcoins. After the recent Bitcoin price rally, Tesla’s net income from its crypto holdings was on par with its second quarter profit.
In particular, Tesla reported net income of $ 1.14 billion for the second quarter – surpassing the $ 1 billion mark for the first time. Those revenues are part of the $ 11.96 billion in revenue Tesla generated primarily from sales of automobiles – about $ 10.21 billion. The remaining $ 354 million came from regulatory loan sales.
Tesla announced on October 1 that it had shipped 241,300 electric vehicles in the third quarter, compared to 201,250 vehicles in the previous quarter. Combined with Tesla’s Bitcoin earnings, expectations are high for the blockbuster earnings, which are expected to be announced after the market closes on October 19th. Piper Sandler analyst Alexander Potter said:
“We expect the third quarter to be TSLA’s strongest quarter of all time.”
Will other companies follow in Tesla’s footsteps?
Tesla’s Bitcoin strategy has been very successful so far and provides a case study of how other companies can replace part of their cash reserves with BTC. However, some of the companies that invested in Bitcoin before Tesla have seen even greater returns.
For example, MicroStrategy made multiple purchases of approximately $ 3.15 billion worth of Bitcoin. After the initial purchase was postponed to August 11, 2020, the company’s net income from Bitcoin is now nearly $ 6.3 billion, nearly double its investment.
Jack Dorsey’s payment services company Square has also made a significant profit on its Bitcoin holdings, now worth more than $ 442 million from a $ 220 million investment. Additionally, Canadian crypto mining company Hut 8 Mining Corp’s total BTC holdings increased more than 600% from $ 39.3 million to around $ 250 million. Back in June, the company also announced plans to hold 5,000 BTC through 2022.
At press time, the BTC price is trading at $ 57.609.
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According to Cointelegraph