Tesla Made $ 1 Billion Profit From Bitcoin Investment: Analyst

Tesla made about $ 1 billion in profit on paper from its bitcoin investment, according to Daniel Ives, analyst at Wedbush Securities.

The company is “on a path to derive more from its Bitcoin investments than profits from the sale of its EV (electric vehicle) cars throughout 2020,” Ives said in a note released Saturday.

Earlier this month, the U.S. automaker revealed in a Securities and Exchange Commission filing that it had purchased $ 1.5 billion worth of bitcoin for “more flexibility to further diversify and maximize returns from our Treasury”.

The purchase was made sometime in January, the company said without disclosing when and at what price it purchased bitcoin. It is not known if Tesla has sold any of the bitcoins yet.

Bitcoin has seen a huge rally this year, steadily hitting new highs. Bitcoin’s market value topped $ 1 trillion for the first time last week, and the cryptocurrency is up 94% since the start of the year.

Ives did not explain how he arrived at this calculation. But according to CoinDesk data, the price of bitcoin rose 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 released his rating.

That’s an increase of around 65%, which would put the profit from Tesla’s $ 1.5 billion bitcoin investment at around $ 975 million. Based on Monday’s intraday high of $ 58,332.36, that profit would be over $ 1 billion.

“While the Bitcoin investment is a side exposure for Tesla, it is clearly a good initial investment and a trend we foresee could have a ripple effect for other public companies in the 12-18. next few months, ”Ives said.

Tesla CEO Elon Musk is a supporter of digital currencies. He recently said that bitcoin was “just a less stupid form of liquidity than cash.”

But he also tweeted on Saturday that the price of bitcoin and another ethereum digital currency “appears high.”