Tesla, an American electric company owned by outspoken Elon Musk, has made nearly $1 billion in digital paper profit from its investment in bitcoin, exceeding profit it made from car sales in 2020.
This was estimated by Daniel Ives, an analyst at Wedbush Securities, in a note published on Saturday.
“Based on our calculations, we estimate that Tesla so far has made roughly $1 billion of profit over the last month…To put this in perspective, Tesla is on a trajectory to make more from its Bitcoin investments than profits from selling its [electric vehicle] cars in all of 2020,” wrote the analyst.
The analyst did not reveal how it calculated the profit. But he cited CoinDesk data in his note that shows bitcoin’s price surged from $34,793.45 on Jan 31 to $57,487.03 on Feb 20.
The bitcoin witnessed around 65% surge in its value, providing an estimate that Tesla on its $1.5 billion investment made nearly $975 million proft.
“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,” the analyst sid.
Earlier this month, Musk’s firm disclosed its investment worth $1.5 billion while filing in a Securities and Exchange Commission.
The electric carmaker unveiled the investment ten days after its chief executive Elon Musk drove up the cryptocurrency’s price by adding a “#bitcoin” tag on his Twitter profile page.
Musk removed the tag from his Twitter bio a few days later but has continued talking up bitcoin and other cryptocurrencies, in particular, dogecoin, to his 46 million Twitter followers.