Tesla’s bitcoin holdings jump by $1bn

Tesla has said the fair market value of its bitcoin holdings reached $2.48bn at the end of March, marking a $1bn increase since it first declared the investment.

The electric carmaker said earlier this year it had bought $1.5bn worth of bitcoin, and started accepting the cryptocurrency as payment for its vehicles.

As the price of bitcoin rallied during the quarter, the value of Tesla’s stockpile rose.

READ  ‘We’ve crossed a line’: Why Goldman Sachs says crypto is here to stay

Tesla registered a net gain of $101m from sales of bitcoin during the quarter — around 10% of its stake — it said in a filing on 27 April.

Bitcoin reached around $59,000 by the end of March, up from the $42,600 mark when Tesla first declared the investment.

The carmaker said earlier this week that it sold an aggregate $272m worth of bitcoin during the period, though the firm generally intends “to hold our bitcoin long-term regardless of the manner of acquisition”.

Chief executive Elon Musk said the sale of bitcoin during the quarter was to prove the “liquidity of bitcoin as an alternative to holding cash on balance sheet”.

In its quarterly earnings, Tesla reported a record profit of $438m, boosted by the bitcoin sale.

READ  Craig Wright, Surrey man Satoshi and the battle for bitcoin

“Tesla has made some $101m on its investment so far, which is all well and good, but huge gains and losses aren’t really what corporate treasuries are all about,” said Nicholas Hyett, equity analyst at Hargreaves Lansdown.

“Investors could well argue that if they wanted to have exposure to bitcoin they would have bought some themselves and don’t need Tesla to do it for them. Still Tesla has never played by the rules – so far that hasn’t stopped it being a winner.”

To contact the author of this story with feedback or news, email Emily Nicolle

Most Related Links :
newsbinding Governmental News Finance News

Source link

Back to top button