According to Daniel Ives, an analyst at Wedbush Securities, Tesla has made roughly $1 billion in paper profits from its investment into bitcoin. As reported by CNBC, the electric car company is “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” Ives estimated in a note published Saturday.
Tesla invested $1.5 billion in bitcoin.
Earlier this month, the U.S. electric carmaker disclosed in a Securities and Exchange Commission filing that it had bought $1.5 billion worth of bitcoin for “more flexibility to diversify further and maximize returns on our cash.” The bitcoin purchase was made in January, the company said without disclosing when or at what price it bought bitcoin for. It’s unclear if the company has sold any of the bitcoin yet. The leading cryptocurrency Bitcoin has seen a huge rally this year, touching fresh record highs regularly. Bitcoin’s market value topped $1 trillion for the first time last week, and the cryptocurrency is up nearly 94% year-to-date.
Elon Musk defends Tesla’s move into bitcoin.
Elon Musk defended Tesla’s action to invest in bitcoin, saying that the difference with cash made it “adventurous enough” for the S&P 500 company to hold the cryptocurrency. He further opined that owning bitcoin was only a little better than holding conventional cash but that the slight difference made it a better asset to hold. However, when fiat currency has a negative real interest, only a fool wouldn’t look elsewhere,” Musk said in a tweet. “Bitcoin is almost as bs as fiat money. The keyword is almost,” Musk tweeted.