American electric car giant Tesla has seen some massive gains from its Bitcoin (BTC) investment, reportedly having made up to $1 billion in profit, according to a new report.
An analyst at Wedbush Securities, a private investment firm in the United States, has calculated that Tesla has made “roughly $1 billion” in the aftermath of its $1.5 billion Bitcoin investment. Daniel Ives estimated Tesla’s Bitcoin profits in an investor note on Saturday, CNBC reports.
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 noted that Tesla’s move is likely to affect other public companies. "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 just a small part of the market 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 officially announced its $1.5 billion Bitcoin investment as part of its filing with the U.S. Securities and Exchange Commission on Feb. 8. It still remains unclear how much Bitcoin Tesla bought and at what price, as the company did not disclose this information in the filing.
As Bitcoin traded between roughly $29,000 and $37,000 in the month of January, a $1.5 billion investment could mean Tesla holds anywhere between 40,000 and 51,000 BTC. At the time of writing, Bitcoin is trading at $56,239, up around 15% over the past seven days, according to data from the Cointelegraph Bitcoin price index.
In late January, Tesla reported its first full-year profit, stating that the company earned $721 million in 2020 after an $862 million loss in 2019.