Bitcoin’s recent price rally has sent Tesla smiling to the bank as the company’s profits may have climbed north of $1 billion. Bitcoin is trading at $59,753 which is a gain of just over 5% in 7 days for the premier cryptocurrency.
Good Business For Tesla
Tesla whipped the cryptocurrency ecosystem into a heightened frenzy back in February when it announced that it added $1.5 billion worth of cryptocurrencies to its holdings. According to the company’s filing with the SEC, it added about 48,000 BTC to its balance sheets but later revealed that it had sold 10% of the holdings to test the market’s liquidity. According to a Q2 earnings report, the sale of 10% of its stash of BTC netted the company a profit of $128 million.
At the time of Tesla’s purchase, the asset was trading at around $35K and at the moment Tesla’s holding of around 43,000 Bitcoin is valued at $2.57 billion given the asset’s recent prices. Bitcoin is trading at $59k and this spike in prices puts the company in the green by an impressive $1 billion.
Tesla’s business with Bitcoin has not always been smooth sailing and there have been a few bumps along the way. In May, the electric car maker rescinded its decision to accept Bitcoin as a payment option for its vehicles over the environmental impact of mining. The effect of the company’s decision triggered a steep fall in prices that saw the asset fall from highs of $60,000 to lows of $29K.
Tesla Is Not The Only One Reaping Bitcoin’s Gains
Other companies that made a similar investment in the asset are equally counting their blessings amid the recent price rally. Microstrategy has stockpiled a significant amount of Bitcoin, spending well over $3 billion to accumulate 109,000 BTC. Since then, the company has almost doubled its investments and shows no signs of slowing down on the asset’s accumulation.
Square has also dabbled into the bitcoin business after its investment of $220 million is now worth well over $400 million. PayPal and other payment giants have offered the cryptocurrency to millions of their users while Stripe has dropped major hints that it could be supporting the asset again for the first time since 2018.
Several pundits have predicted that Bitcoin is well on the path to surpass the $100,000 mark in 2021. If their predictions are accurate, Tesla and other firms betting in Bitcoin might just bag themselves a fortune.
