Much has been done about the hefty amount that Tesla Inc. invested in bitcoin, a speculative asset that has only existed since 2009.
Read: Why did Tesla buy bitcoin?
However, early estimates by prominent technology analyst Dan Ives show that the investment by the electric vehicle manufacturer, led by outspoken Chief Executive Officer Elon Musk, is already driving digital paper profits of at least $ 1 billion as the asset’s price reaches up to records rising. .
“Based on our calculations, we estimate that Tesla has made about $ 1 billion in profit so far in the last month … To put this in perspective, Tesla is on track to make more from its Bitcoin investments than its selling his [electric vehicle] cars throughout 2020, ” Wedbush prolific analyst Dan Ives wrote in a note published Saturday afternoon.
Earlier this month, Tesla Inc. TSLA,
became the latest and most famous major company to take a stake in bitcoin, underscoring the increasing adoption of the crypto. The Palo Alto, California-based company said in a public filing on Feb. 8 that it had purchased $ 1.5 billion worth of bitcoin BTCUSD,
and that it expects to accept cryptocurrency payments for its products in the future.
Tesla’s move to invest in bitcoin was seen as further confirmation of the legitimacy of the budding asset that only existed about 12 years ago.
On Friday, bitcoin’s price soared to a record high of around $ 54,000 and broke a total market value of $ 1 trillion, cementing the crypto’s perception as a legitimate asset, if not a budding one.
Checking out: Is Bitcoin Heading To $ 100,000 In 2021 Or Is The Price ‘Unsustainable’?
On Saturday, a single bitcoin expanded its gains to a record $ 57,492, according to CoinDesk. According to data from FactSet, Bitcoin prices are up more than 90% so far in 2021. In comparison, gold GC00,
considered a rival to bitcoin, is down about 6% in 2021. Meanwhile, the Dow Jones Industrial Average DJIA,
has risen nearly 3% so far in the year, the S&P 500 index SPX,
up about 4% and the Nasdaq Composite Index COMP,
rose 7.7% in the same period.
Tesla’s share has risen by more than 11% since the beginning of the year.
The Wedbush analyst said it’s not clear whether Tesla’s bitcoin move is a stunt, in line with Musk’s perception as an iconoclast, but still believes it is likely that other companies will be forced to follow suit and some of it. exchange their money for bitcoins in the future.
“We still expect less than 5% of publicly traded companies to go this route until more regulatory target posts are in place around the crypto market, which is clearly starting to get more general adoption in 2021 and we believe this will have a seismic impact on blockchain, payments, banks and semis in the coming years, ”wrote Ives.