Tesla’s bitcoin gambit already made $ 1 billion, more than 2020 profits from car sales, analyst estimates

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Much has been made of the considerable sum that Tesla Inc. has invested in bitcoin, a speculative asset that has only been around since 2009. Read: Why did Tesla buy bitcoin? However, early estimates from prominent tech analyst Dan Ives see the electric vehicle maker’s investment, led by CEO Elon Musk, already generating a profit on digital paper of at least $ 1 billion, as the Asset price soars to records. .

“Based on our calculations, we estimate that Tesla has so far made approximately $ 1 billion in profit over the last month … To put this in perspective, Tesla is on a trajectory to do more with its Bitcoin investments than the profits from the selling your [electric vehicle] cars throughout 2020, ”wrote the prolific Wedbush analyst Dan Ives in a note published Saturday afternoon. Earlier this month, Tesla Inc. TSLA, -0.77% became the latest and best-known major corporation to take a stake in bitcoin, underscoring the growing acceptability of crypto. The Palo Alto, California-based company on February 8, in a public presentation said that it bought $ 1.5 billion of bitcoin BTCUSD, + 0.65% and that it hopes to start accepting payments in the cryptocurrency for its products in the future. Tesla’s decision to invest in bitcoin was seen as further confirmation of the legitimacy of the nascent asset that did not exist until about 12 years ago. On Friday, the price of bitcoin soared to a record high around $ 54,000 and surpassed a total market valuation of $ 1 trillion, further reinforcing the perception of the crypto as a legitimate asset, if not a fledgling one. Take a look: is Bitcoin heading to $ 100,000 in 2021 or is its price ‘unsustainable’? On Saturday, a single bitcoin extended its gain to a record $ 57,492, according to CoinDesk. Bitcoin prices have risen more than 90% so far in 2021, according to data from FactSet. In comparison, gold GC00, + 0.32%, considered a rival to bitcoin, is down about 6% in 2021. Meanwhile, the Dow Jones Industrial Average DJIA, + 0.00% has gained almost 3% so far in the year. year, the S&P 500 SPX, -0.19% has risen about 4% and the Nasdaq COMP Composite Index, + 0.07% has advanced 7.7% during the same period. Tesla shares, by the way, are up more than 11% since the beginning of the year. The Wedbush analyst said it is unclear whether Tesla’s Bitcoin move is a gimmick, aligned with Musk’s perception as an iconoclast, but he still believes other corporations are likely to be forced to follow suit and switch parts of your cash for bitcoins in the future. “We still expect less than 5% of public companies to go this route until more regulatory targets are set in the crypto market, which is clearly starting to gain more widespread adoption in 2021 and we believe it will have a seismic impact for blockchain, payments, banks and semis in the next few years, “wrote Ives.