Persistence pays off – at least for Tesla’s controversial Bitcoin bet. The electric vehicle maker’s once-questioned $1.5 billion cryptocurrency investment has transformed into a billion-dollar windfall, according to recent SEC filings. Tesla’s remaining 11,509 Bitcoin stash, worth $1.119 billion, now represents a hefty 10% of the company’s gross cash reserves.
The journey hasn’t been smooth. After making its initial Bitcoin splash in February 2021, Tesla briefly flirted with accepting the cryptocurrency for car purchases. That experiment ended quickly – environmental concerns, they said. Then came the big sell-off in 2022, when Tesla dumped 75% of its holdings for $936 million, citing liquidity needs. Crypto critics had a field day with that one. The company’s mining-related concerns were valid, as Bitcoin operations consume substantial energy resources equivalent to Singapore’s annual carbon output.
But look who’s laughing now. Tesla just reported a whopping $600 million profit from Bitcoin in Q4 2024, accounting for 26% of its net income. Not bad for a “side hustle.” The company’s strategic decision to hold onto a portion of its Bitcoin has paid off handsomely, with an unrealized gain of $589 million under new accounting rules. Bitcoin’s remarkable surge to 105,023 per BTC has further validated Tesla’s investment strategy.
Speaking of rules, December 2024 brought a game-changing shift. New FASB guidelines now allow companies to mark digital assets to market value, finally letting Tesla’s Bitcoin holdings shine at their true worth on the balance sheet. The company wasted no time reorganizing its crypto assets, moving them across seven new wallets. This move aligns with other major tech companies who have integrated Bitcoin into their corporate strategies.
With an estimated average purchase price of $38,000 per coin, Tesla’s Bitcoin bet looks pretty smart in hindsight. The new accounting rules don’t just make the books look prettier – they open doors for borrowing against these digital assets.
And here’s the kicker: Tesla hasn’t sold any Bitcoin since that 2022 liquidation. Maybe they’re onto something. As corporate America watches from the sidelines, Tesla’s billion-dollar crypto success might just be the nudge others need to take the digital plunge.
