Tesla’s bold entry into the Bitcoin (BTC) market is paying off in 2021, as the price of BTC on October 14 continues its rally to surpass $ 58,000.
Tesla owns approximately 43,200 BTC, which according to the online monitoring resource Bitcoin Treasuries corresponds to approximately $ 2.5 billion at current prices. The sum is 65%, or $ 1 billion, more than the auto maker paid in February, when Elon Musk’s company revealed it had added $ 1.5 billion in BTC to its balance sheet.
In Q2, Tesla sold 10% of its Bitcoin reserves at a reported average price of around $ 50,000 per token. In its Q2 earnings report, the company reported making over $ 128 million in gains from selling Bitcoin.
Car sales in Q2 generated over $ 1 billion
Following the most recent rebound in Bitcoin’s price, Tesla’s net profits from its crypto reserves turned out to be equal to its Q2 earnings.
In the second quarter, Tesla reported net profit of $ 1.14 billion, surpassing the $ 1 billion mark for the first time. The sum comes from Tesla’s $ 11.96 billion in revenue primarily from selling cars, about $ 10.21 billion. The remaining $ 354 million comes from the sale of green certificates.
On October 1, Tesla revealed that it had sold 241,300 electric vehicles during Q3, up from 201,250 in the previous quarter. Combined with the gains from its Bitcoin reserves, there are high expectations for a substantial profit report, which will be released on October 19 at the close of the market.
“We believe Q3 will be the strongest quarter ever for TSLA,”Said Alexander Potter, analyst at Piper Sandler.
Will other companies follow Tesla’s example?
So far, Tesla’s Bitcoin strategy has been a great success, offering a case study on how other companies could replace a portion of their cash reserves with BTC.
That said, several companies that invested in Bitcoin before Tesla saw even bigger gains.
For example, business intelligence firm MicroStrategy has amassed approximately $ 3.15 billion in Bitcoin through several rounds of purchase, the first dating back to August 11, 2020. Now, the net profit generated by Bitcoin in the company is close to 6. 3 billion dollars, almost doubling the investment.
Square, Jack Dorsey’s payment company, also posted substantial gains from its Bitcoin reserves, now equivalent to over $ 442 million compared to the $ 220 million investment.
Canadian crypto mining firm Hut 8 Mining Corp saw the value of its $ 39.3 million Bitcoin purchase increase by more than 600% to around $ 250 million. In June, the company revealed plans to accumulate 5,000 BTC by 2022.
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