Tesla is about to make more money from its investment in Bitcoin than revenues from selling its electric vehicles in all of 2020, said the analyst at Wedbush Securities.
American electric car giant Tesla has seen some huge profits from its Bitcoin (BTC) investment, potentially worth up to $1 billion in profit, according to a new article.
An analyst at Wedbush Securities, a private investment company in the United States, has estimated that Tesla has made “approximately $1 billion” of its $1.5 billion Bitcoin investment. Daniel Ives calculated Tesla’s Bitcoin earnings in an investor’s note on Saturday, CNBC notes.
Amid Bitcoin’s parabolic surge to become a $1 trillion asset, Ives said, “Tesla is on a trajectory to make more from its Bitcoin investments than profits from selling its electric vehicle cars in all of 2020.”
Ives acknowledged that Tesla’s move is likely to have an effect on other public corporations. “While the Bitcoin investment is a side show for Tesla, it’s clearly been a good initial investment and a trend we expect could have a ripple impact for other public companies over the next 12 to 18 months,” he wrote. However, Ives expects only a small part of the industry to follow the trend due to regulatory uncertainty issues:
“We still expect less than 5% of public companies will head down this route until more regulatory goal posts are put in place around the crypto market, which is clearly starting to gain more mainstream adoption in 2021.”
Tesla publicly announced its $1.5 billion investment in Bitcoin as part of its filing with the U.S. Securities and Exchange Commission on 8 February. It remains unclear how much Bitcoin Tesla purchased and at what price, as the company did not reveal this information in the filing.
As Bitcoin traded between roughly $29,000 and $37,000 in the month of January, an investment of $1.5 billion could mean that Tesla holds between BTC 40,000 and BTC 51,000. At the time of writing, Bitcoin is trading at $56,239, up about 15 percent over the last seven days, according to the Bitcoin price index.
At the end of January, Tesla announced its first full-year profit, reporting that the company had raised $721 million in 2020 after a loss of $862 million in 2019.
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