Tesla Makes 100% Profit From Bitcoin Investment In 10 Weeks
In the ten weeks since buying Bitcoin, Tesla has made on average $150 million a week, amounting to $1.5 billion profit.
The electric car maker used $1.5 billion of its cash reserves to buy an estimated 48,000 bitcoins, and at today’s price of $62,2740, those bitcoins are now worth $2.99 billion, just down from its all-time high of $64,536.
The profit made from its Bitcoin purchase is more than double the $721 million Tesla made from selling cars in the whole of 2020.
After Tesla broke the news of its purchase the Bitcoin price had its biggest 24hr green candle spiking from around $37k to over $48k – a then new all-time high.
Since purchasing Bitcoin, Tesla also announced it would be accepting Bitcoin for its cars, and any proceeds in Bitcoin would be kept in Bitcoin.
‘Bitcoin paid to Tesla will be retained as bitcoin, not converted to fiat currency,’ Tesla CEO Elon Musk tweeted in March.
Bitcoin – Supply And Demand 101
Many have put Bitcoin’s meteoric rise since down to Tesla’s purchase and while it has helped it’s only one ingredient of the Bitcoin pie.
Bitcoin’s rise is simply a case of demand outstripping supply, ultimately triggered by last year’s halvening.
Everybody was expecting this bull rally. Maybe not as quick as where we are right now, but arguably MicroStrategy has had more impact on the Bitcoin price since it started buying up as much Bitcoin as it possibly could.
Last August, MicroStrategy announced it was going onto a Bitcoin standard and became the first corporation to hold Bitcoin on its balance sheet.
MicroStrategy’s initial $250 million investment shocked everybody, but the software analytics firm hasn’t stopped buying Bitcoin since.
It made a further $175 million investment a month later, and has since issued corporate bonds at an accumulative price of $1.4 billion so it can buy more bitcoins.
To date, MicroStrategy has spent $2.226 billion on 91,579 bitcoins, which are valued at $5.691 billion today.
MicroStrategy CEO Michael Saylor is credited the task of convincing Tesla CEO Elon Musk to buy Bitcoin.
When Musk was openly tinkering with the idea on Twitter, the MicroStrategy CEO responded, telling him he would share his playbook with him. Just 3 weeks later Tesla announced its Bitcoin purchase.
Corporate Demand For Bitcoin Growing Quickly
Tesla and MicroStrategy putting Bitcoin on their balance sheet has helped speed Bitcoin adoption and acceptance up, and that is only going to increase.
MicroStrategy held its Bitcoin for Corporations conference in February, which it shared the same playbook with the thousands of CEOs and CIOs in attendance.
There are already other corporations, such as MassMutual, PayPal and Square Inc. holding Bitcoin on their balance sheets and using it as a payments rail respectively.
And with strong rumours that Walmart is buying Bitcoin, and Time Magazine also holding it on its balance sheet the corporate demand for Bitcoin alone is far outstripping supply.
The speed at which corporations are gobbling up Bitcoin, many say it’s leading to a supply shock. When that happens, Tesla’s $1.5 billion might even turn into $15 billion.
