Tesla, led by Elon Musk, confirmed that it purchased about $ 1.5 billion worth of bitcoin in January and expects to accept it as payment in the future.
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Tesla has made approximately $ 1 billion in paper profits from its investment in bitcoin, according to Daniel Ives, an analyst at Wedbush Securities.
The company is “on track to get more out of its Bitcoin investments than profits from the sale of its EVs (electric vehicles) by 2020,” Ives estimated in a note published Saturday.
Earlier this month, the US electric carmaker announced in a Securities and Exchange Commission that it had purchased $ 1.5 billion worth of bitcoin for “more flexibility to further diversify and maximize returns on our money.”
The purchase took place some time in January, the company said without disclosing when or at what price it bought bitcoin. It’s unclear whether Tesla has already sold any of the bitcoin.
Bitcoin has seen a massive rally this year, regularly hitting new all-time highs. Bitcoin’s market value first rose above $ 1 trillion last week and the cryptocurrency is up 94% since the beginning of the year.
Ives did not explain how he arrived at that calculation. But according to CoinDesk’s data, bitcoin’s price has risen from an intraday high of $ 34,793.45 on Jan. 31 to an intraday high of $ 57,487.03 on Feb. 20, the day Ives published his note.
That’s an increase of about 65%, which would bring profits on Tesla’s $ 1.5 billion bitcoin investment to about $ 975 million. Based on Monday’s intraday high of $ 58,332.36, that profit would be more than $ 1 billion.
“While the Bitcoin investment is an afterthought for Tesla, it has clearly been a good initial investment and a trend that we expect could have a wave impact on other public companies over the next 12 to 18 months,” said Ives.
Tesla CEO Elon Musk is an advocate of digital currency. He recently said that bitcoin is “just a less stupid form of liquidity than cash”.
But he also tweeted on Saturday that the price of bitcoin and another digital currency ethereum “appears high.”