Tesla, led by Elon Musk, confirmed that it bought about $ 1.5 billion in bitcoins in January and expects to start accepting it as payment in the future.
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According to Daniel Ives, an analyst at Wedbush Securities, Tesla has made a paper profit of nearly $ 1 billion from its investment in bitcoin.
The company “is on track to make more of its Bitcoin investments than the profits from the sale of its EV (electric vehicle) vehicles throughout 2020,” Ives estimated in a note released Saturday.
Earlier this month, the American electric car maker announced in a statement from the Securities and Exchange Commission that it had bought bitcoin worth $ 1.5 billion for “more flexibility to diversify and maximize our cash returns.” .
The purchase was made some time in January, the company said without revealing when or at what price it bought Bitcoin. It’s unclear if Tesla has sold any of the bitcoins yet.
Bitcoin has experienced a huge rally this year, frequently hitting all-time highs. Bitcoin’s market value topped $ 1 trillion for the first time last week and the cryptocurrency has increased 94% over the previous year.
Ives did not explain how he came to this calculation. But according to CoinDesk data, the price of Bitcoin has gone 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 its note .
This represents an increase of approximately 65%, which would place the profit of Tesla’s bitcoin investment at $ 1.5 billion around $ 975 million. Based on Monday’s intraday high of $ 58,332.36, that profit would exceed $ 1 billion.
“While Bitcoin investing is a side show for Tesla, it has clearly been a good initial investment and a trend that we hope could have an impact on other public companies over the next 12 to 18 months,” Ives said. .
Elon Musk, CEO of Tesla, is an advocate of digital currencies. He recently said that Bitcoin is “simply a less silly form of liquidity than cash.”
But he also tweeted Saturday that the price of bitcoin and another digital currency ethereum “looks high.”