Tesla’s bold attack on the Bitcoin (BTC) market paid off in 2021 when the price of BTC surged in October and surpassed $ 58,000 on October 14.
According to the online monitoring resource Bitcoin Treas Bonds, Tesla currently owns about 43,200 BTC, worth about $ 2.5 billion at current prices. That’s about 65%, or $ 1 billion, more than what the automaker paid in February when Elon Musk announced that he added $ 1.5 billion in BTC to the balance sheet.
Daily BTC / USD price chart. Source: TradingView
In the second quarter of the year, Tesla sold 10% of its bitcoin holdings – roughly 46,000 BTC – at an average price of around $ 50,000 per token. In its second quarter earnings report, the company announced that it has generated $ 128 million in profits from the sale of bitcoins.
Tesla made its first billion in the second quarter from car sales
Following the recent surge in bitcoin prices, Tesla’s net profit came from its cryptocurrencies to the same extent as its Q2 revenue.
Specifically, Tesla reported net income of $ 1.14 billion for the second quarter, surpassing the $ 1 billion mark for the first time. The revenue was part of the $ 11.96 billion in revenue that Tesla received primarily from auto sales – about $ 10.21 billion. The remaining $ 354 million came from the sale of regulatory loans.
On October 1, Tesla reported that it delivered 241,300 electric vehicles in the third quarter, up from 201,250 in the previous quarter. Combined with Tesla’s bitcoin earnings, the big expectations will be released after the market closes on October 19.
“We believe the third quarter will be the most successful TSLA quarter ever,” said Piper Sandler analyst Alexander Potter.
Will other companies follow?
So far, Tesla’s Bitcoin strategy has been very successful and has provided a case study of how other companies exchange some of their cash reserves for BTC.
However, many companies that invested in Bitcoin before Tesla have made even more profits.
For example, business intelligence company MicroStrategy bought Bitcoin for $ 3.15 billion in multiple rounds of purchases. Since its first acquisition on August 11, 2020, the company’s net worth is approaching $ 6.3 billion, nearly double its investment.
Jack Dorsey’s payment services company Square has also made significant gains from owning bitcoin, which is now worth over $ 442 million out of a $ 220 million investment.
Additionally, from Canada’s Hut 8 Mining Corp, the value of $ 39.3 million worth of bitcoin purchases increased more than 600% to around $ 250 million. Back in June, the company also announced plans to hold 5,000 BTC by 2022.