Elon Musk’s $1 billion Bitcoin profit report details
Tesla’s bold step into the Bitcoin market has been showing good results in 2021 as its price is rallying in October, hitting over $58,000 as of October 14.
At present, Tesla holds approximately 43,200 BTC, which is roughly $2.5 billion as per today’s prices. The data value has been provided by Bitcoin Treasuries, an online monitoring portal. The figures are 65 per cent or $1 billion more than what Tesla had paid in February 2021 when Musk’s company revealed adding $1.5 billion in BTC to its balance sheet.
In its Q2, Tesla had sold about 10 per cent of its Bitcoin holdings which is about 46,000 BTC — at an average price of about $50,000 per token. In the Q2 earnings report, the company had notified booking gains worth $128 million from its Bitcoin sale.
Following the recent most Bitcoin rebound, Tesla’s net profits from crypto holdings have become as much as its income from Q2.
Tesla has detailed in its report that $1.14 billion is its net profit for Q2, crossing the $1-billion mark for the first time ever. The income is a part of $11.96 billion in revenue that was made by Tesla by its car sale, which is about $10.21 billion. The remaining $354 million has come from the sales of regulatory credits.
On October 1, Tesla had revealed that it delivered 241,300 electric vehicles during Q3, in comparison to 201,250 vehicles in the previous quarter. In combination with Tesla’s Bitcoin profits, the expectations are extremely high for blockbuster earnings that are set to be released after market closing on October 19.
So far, Tesla’s Bitcoin strategy has been very successful, thus providing a case study of the ideal way corporates can replace portions of their cash reserves with Bitcoin.
Several companies that had invested in Bitcoin before Tesla has recorded even higher gains. An example is MicroStrategy that had purchased about $3.15 billion worth of Bitcoin in multiple rounds of buying. Its first purchase dated back to August 11, 2020. Its net profits from Bitcoin are about $6.3 billion currently, which is almost double its investment.
Square, Jack Dorsey’s payment service firm, has also noted considerable profits from holding Bitcoin, which is worth over $442 million from its initial $220-million investment.
Canada-based crypto miner Hut 8 Mining Corp has also seen its $39.3-million Bitcoin purchase stagger high in value by 600 per cent peaking at $250 million. Back in June 2021, the company had also revealed plans for holding 5,000 BTC by 2022.