American electric car manufacturer Tesla has seen some massive gains from investing in Bitcoin [BTC], reportedly having made up to $1 billion in profit, consistent with a new official report.
An analyst at Wedbush Securities, a private investment company within the U.S., has calculated that Tesla has made “roughly $1 Bln” within the aftermath of its $1.5 Bln Bitcoin investment. Daniel Ives estimated Tesla’s Bitcoin profits in an investor note earlier on Saturday, as per the CNBC report.
Amid Bitcoin’s parabolic surge to become a $1 trillion asset, Ives added, “Tesla is on a trajectory to form more from its Bitcoin investments than profits from selling its electric vehicle cars altogether of 2020.”
Ives added that Tesla’s move is probably going to affect other public firms. “While the Bitcoin investment may be a sideshow for Tesla, it’s clearly been an honest initial investment and a trend we expect could have a ripple impact for other public companies over subsequent 12 to 18 months,” he added. However, Ives expects just a little a part of the market to follow the trend due to regulatory uncertainty issues:
“We still expect but 5% of public firms will head down this route until more regulatory goalposts are put in situ around the cryptocurrency market, which is clearly beginning to gain more mainstream adoption in 2021.”
Tesla officially announced its $1.5 Bln Bitcoin investment as a part of its filing with the United States SEC [Securities and Exchange Commission] earlier on 8th Feb. It still remains unclear what proportion Bitcoin Tesla bought and at what price, as the firm didn’t officially disclosed this information within its filing.
As Bitcoin traded between roughly $29,000 and $37,000 within the month of January, a $1.5 billion investment could mean Tesla holds anywhere between 40k and 51k BTC. At the time of reporting, Bitcoin is trading at $56,662 USD, up around 15% over the past week, consistent with data from the CoinMarketCap.
Also earlier in January, Tesla reported its first full-year profit, stating that the firm earned $721 Mln within 2020 after an $862 Mln estimated loss in 2019.