Tesla on Track to “Make $1 Billion” in Bitcoin Profits

Mandatory Credit: Photo by BRITTA PEDERSEN/POOL/EPA-EFE/Shutterstock (11088639m)SpaceX owner and Tesla CEO Elon Musk arrives on the red carpet for the Axel Springer award, in Berlin, Germany, 01 December 2020.

Tesla, which revealed it bought $1.5 billion worth of Bitcoin earlier this month, is “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” according to a note by Daniel Ives, an analyst at Wedbush Securities, reported by CNBC.

See: Bitcoin’s Value Skyrockets to $1 Trillion as Price Hits $54,000
Find: Elon Musk, World’s Wealthiest Person, Touts Bitcoin Over Cash

Ives estimates that Tesla has made roughly $1 billion in paper profits from its investment into Bitcoin, according to CNBC.

In addition to the Bitcoin investment, Tesla will begin accepting the cryptocurrency as a form of payment for its products in the near future, according to a Tesla Securities and Exchange Commission filing.

See: 6 Reasons Tesla Might Be the Stock You Need to Buy
Find: Why Some Money Experts Believe In Bitcoin and Others Don’t

“While the Bitcoin investment is a side show for Tesla, it’s clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months,” according to CNBC’s report on Ives’ note.

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Bitcoin broke the $50,00 ceiling last week, reaching $58,000 over the weekend before dipping back to $53,000 this morning.

CoinMarketCap valued the crypto at around $1 trillion last week, a huge milestone. Bitcoin has added more than $415 billion of value in 2021 alone, Bloomberg reports.

See: Long-Term Investors Hold Most of the Bitcoin Supply
Find: Mark Cuban – “Bitcoin is Exactly like the Dot Com Bubble”

Musk defended Tesla’s Bitcoin purchase last week, tweeting that Bitcoin “is simply a less dumb form of liquidity than cash.” However, he tweeted again on Saturday, saying that Bitcoin and Ethereum “do seem high lol.”

Tesla (NASDAQ: TSLA), which became the newest S&P 500 member when it joined the index in December 2020, missed the consensus earnings-per-share estimate for the fourth quarter (as reported by Seeking Alpha) of $1.03, reporting $0.80 EPS, according to its earnings statement. However, the company beat the revenue estimate of $10.38 billion, reporting $10.74 billion in revenue, a 46% increase year over year.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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