According to a new report, American electric car giant Tesla has seen some massive gains from its investment in Bitcoin, reportedly making up to $1 billion in profit.
An analyst at Wedbush Securities, a private investment firm in the United States, calculated that in the aftermath of its $1.5 billion Bitcoin investment, Tesla made “roughly $1 billion.” CNBC reports that on Saturday, Daniel Ives estimated Tesla’s Bitcoin profits in an investor note.
In the midst of 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 acknowledged that Tesla’s move is expected to have an effect on 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 only a small portion of the industry to follow the pattern due to regulatory uncertainty issues:
“We still expect less than 5% of public companies will head down this route until more regulatory goalposts are put in place around the crypto market, which is clearly starting to gain more mainstream adoption in 2021.”
According to cointelegraph.com, Tesla officially announced its $1.5 billion investment in bitcoin as part of its filing with the U.S. Securities and Exchange Commission on 8 February. It also remains uncertain how much Bitcoin Tesla purchased and at what price, as this detail was not revealed in the filing by the firm.
As Bitcoin traded in the month of January between around $29,000 and $37,000, an investment of $1.5 billion could mean that Tesla keeps between 40,000 and 51,000 BTC anywhere. Bitcoin is trading at $53,527 at the time of writing.