Tesla at $1 billion profit from Bitcoin
Tesla's daring entry into the Bitcoin market has started paying off in 2021, with BTC's price rising in October to reach more over $58,000 on October 14.
According to the online tracking portal Bitcoin Treasuries, Tesla now possesses around 43,200 BTC, which is worth approximately $2.5 billion at today's rates. This is around 65% or $1 billion more than what the carmaker paid in February, when Elon Musk's firm disclosed that it had added $1.5 billion in BTC to its balance sheet.
In the second quarter, Tesla sold 10% of its Bitcoin assets, around 46,000 BTC, for a reported average price of around $50,000 per token. The business reported $128 million in profits from its Bitcoin sale in its Q2 financial report. Tesla achieved its first billion dollars in profit from car sales in the second quarter.
Following the recent Bitcoin price bounce, Tesla's net earnings from its crypto assets equaled its Q2 income. In particular, Tesla recorded a $1.14 billion net profit for the second quarter, the first time it has ever surpassed the $1 billion mark. The profits was a portion of Tesla's $11.96 billion in revenue, which was mostly generated by car sales — around $10.21 billion. The remaining $354 million came from the sales of regulatory credits.
Tesla said on October 1 that it delivered 241,300 electric vehicles in the third quarter, up from 201,250 in the previous quarter. Expectations are high for blockbuster results to be disclosed after the market closes on Oct. 19, when combined with Tesla's Bitcoin profits.
"We believe Q3 will be TSLA's best quarter ever," Piper Sandler analyst
Alexander Potter: Will more businesses follow suit?
Tesla's Bitcoin strategy has been extremely effective thus far, serving as a case study for how other corporations may replace a portion of their cash reserves with BTC. However, some firms who invested in Bitcoin before Tesla saw much higher returns.
For example, the business analytics firm MicroStrategy spent around $3.15 billion on Bitcoin in numerous rounds of purchases. With its initial purchase on August 11, 2020, the company's net Bitcoin earnings are now close to $6.3 billion, nearly tripling its investment.
Square, Jack Dorsey's payment processing business, has also enjoyed significant profits from holding Bitcoin, with its $220 million investment now worth over $442 million. Furthermore, Hut 8 Mining Corp, a Canadian crypto mining business, has seen the value of its $39.3 million Bitcoin acquisition grow by more than 600%, reaching about $250 million. In June, the firm also stated that it intends to store 5,000 BTC by 2022.