• September 27, 2023

Tesla bitcoin gambit already made $1 billion, more than 2020 profit from car sales, estimates analyst

Much has been made of the large amount of money Tesla Inc. invested in Bitcoin, a speculative commodity that has only been around since 2009.

Read: Why did Tesla buy Bitcoin?

According to initial estimates by well-known technology analyst Dan Ives, the electric vehicle maker’s investment, led by outspoken CEO Elon Musk, already sees a profit from digital paper of at least $ 1 billion as the price of the asset soars to record levels.

“Based on our calculations, we estimate that Tesla has made around $ 1 billion in profit so far last month. To put this in perspective, Tesla is well on its way to getting more out of its Bitcoin investments than from selling its profits [electric vehicle] Cars all of 2020, ”Wedbush prolific analyst Dan Ives wrote in a note posted Saturday afternoon.

Earlier this month, Tesla Inc.
TSLA, -0.77%
has been the newest and most famous big company to participate in Bitcoin, which underlines the increasing acceptance of crypto. Headquartered in Palo Alto, California, on February 8th in a public filing said it bought $ 1.5 billion bitcoin
BTCUSD, + 1.65%
and that it expects to accept payments in the cryptocurrency for its products in the future.

Tesla’s move to invest in Bitcoin was seen as further confirmation of the legitimacy of the nascent asset, which only existed about 12 years ago.

Bitcoin price soared to a record high of around $ 54,000 on Friday and broke an overall market valuation of $ 1 trillionThis strengthens the perception of crypto as a legitimate, if not an emerging good.

Check: Will Bitcoin be at $ 100,000 in 2021 or is the price “unsustainable”?

On Saturday, a single bitcoin extended its profit to a record $ 57,492. according to CoinDesk. According to FactSet data, Bitcoin prices have so far increased by over 90% in 2021. For comparison: gold
GC00, + 0.32%,
As a rival of Bitcoin, it is considered to be around 6% in 2021. Meanwhile, the Dow Jones Industrial Average
DJIA, + 0.00%
The S & P 500 Index has so far gained almost 3% in the reporting year
SPX, -0.19%
is up around 4% and the Nasdaq Composite Index
COMP, + 0.07%
rose by 7.7% over the same period.

Incidentally, Tesla shares have risen by over 11% since the beginning of the year.

The Wedbush analyst said it was not clear whether Tesla’s Bitcoin move was a ploy consistent with Musk’s perception as an iconoclast, but continues to believe that other companies are likely to be forced to follow suit follow and exchange part of their money for this bitcoins in the future.

“We still believe that less than 5% of publicly traded companies will go down this path until more regulatory targets are set for the crypto market, which is clearly gaining acceptance in 2021 and we believe that will have seismic effects on blockchain , Payments, Banks, and Semis in the Years to Come, ”wrote Ives.

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