Tuesday, February 23, 2021 19:11 PM (GMT + 7)
Tesla’s investment in Bitcoin has paid off well, as reported by Wedbush Securities analyst Daniel Ives.
According to Ives, Tesla made about $ 1 billion in profit from investing in Bitcoin. Back in January, Tesla announced that it spent $ 1.5 billion buying Bitcoin in an effort to “further diversify and maximize profits” from its cash. Tesla also said that in the future, it will start accepting cryptocurrencies as payment for its electric vehicles.
In a recently published note shared with CNBC, Ives explained that Tesla’s investment has been successful and that other public companies may follow suit when diversifying their stakes.
“Tesla is on a path to make more money from its Bitcoin investments than profit from the sale of its EV cars (electric cars) throughout the year 2020,” said Ives. “This is a sub-program for Tesla, but obviously this is a good initial investment and a trend we expect could have a ripple effect for other public companies over the next 12 to 18 months.”
Over the course of last year and through early 2021, Bitcoin witnessed a massive rebound as the price of each Bitcoin rose from $ 7,347 in January of last year to its recent high, Feb. 21, of 57,489. USD. In fact, Bitcoin’s market value recently reached $ 1 billion for the first time, and so far, the cryptocurrency has grown 94 percent so far.
While Ives did not explain how he achieved his calculations when Tesla’s investment in Bitcoin reached a profit of $ 1 billion, based on data from CoinDesk, the Bitcoin cryptocurrency has risen from a high. $ 34,793 on Jan. 31 to a peak of $ 57,487 on Feb. 20, when Ives posted his notes.
Although Elon Musk is a strong advocate of Bitcoin and even Dogecoin, in a recent tweet, he said: “Tesla’s actions do not directly reflect my opinion. Owning some Bitcoins is simply risky enough for an S&P 500 company. To be clear, I’m not an investment, I’m an engineer. I don’t even own any publicly traded stock other than Tesla. However, when monetary returns are having negative real interest rates, only a fool will look elsewhere. Bitcoin is almost a temporary investment.
Only time will tell if other major companies will decide to follow in Tesla’s footsteps but so far their decisions to invest in Bitcoin have paid off.
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