Bitcoin investment proved more profitable for Tesla than EV sales

Tesla’s unrealized profit from a $1.5 billion in bitcoin investment proved higher than the profit from selling electric vehicles in 2020, according to Wedbush Securities.

There’s no doubt that $TSLA has already made a billion dollars on paper due to the recent #Bitcoin investment. Equity Research Analyst, @DivesTech shared this news on #Tesla and more with @SquawkCNBC. https://t.co/qPx00dnplt

— Wedbush Securities (@Wedbush) February 23, 2021

In CNBC’s interview, analyst Daniel Ives said that Tesla’s ‘paper’ profit from investments in digital gold had topped $1 billion. He declined to disclose the basis of his calculations and suggested that other public companies may follow the automaker’s example.

“Buying Bitcoin is a side activity for Tesla. Nevertheless, the initial investment clearly turned out to be successful,” said Ives.

According to CoinGecko, on January 31 Bitcoin stood at about $35,000. On Sunday, February 21, the price of the leading cryptocurrency reached $58,000. A roughly 65% rise would have brought Tesla about $975 million. For comparison: in 2020 the automaker earned $721 million in profit from EV sales.

As of writing, Tesla held 48,000 BTC worth $2.58 billion, according to Bitcoin Treasuries.

Data: Bitcoin Treasuries.

Following reports of the Bitcoin purchase, the automaker’s shares moved in the opposite direction to the price of the first cryptocurrency.

On February 9, former Goldman Sachs investment director Gary Black said that closed a long position in Tesla’s securities.

On February 20, Bitcoin’s market capitalization reached $1.068 trillion. According to The Block, this figure accounted for just over 10% of gold’s market capitalization.

Data: The Block.

On Monday, February 22, the price briefly fell to $47,500. The one-hour long-position liquidations in Bitcoin futures amounted to $410 million.

As of writing, digital gold is trading around $46,800. Over the past 24 hours Bitcoin declined about 15.9%, according to CoinGecko. The asset’s market capitalization stands at $866.2 billion.

Four-hour BTC/USD chart from Bitstamp on TradingView.

Earlier, Elon Musk described Tesla’s investment in the leading cryptocurrency as ‘quite risky‘.

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