Tesla Failed to Capitalize on $300M Gains on BTC Holding

January 28, 2024

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Tesla, an American multinational automotive and clean energy company based in Austin, Texas, failed to capitalize on gains of around $300 million by refusing to HODL Bitcoin and selling most of the digital assets that it held on its balance.

It’s significant to note that Elon Musk, a billionaire businessman and internet sensation, has sold more than 70% of his company’s Bitcoin holdings so far but has refrained from doing so in the future, demonstrating the company’s more cautious approach.

Bitcoin Outperforms Tesla

Tesla first invested in Bitcoin back in February 2021, buying $1.5 billion worth of the leading cryptocurrency. Interestingly, the digital asset’s price was around $36,000 at this time. Notably, since the first reported BTC balance on February 8, 2021, the price of the company’s stock is down 40% against Bitcoin.

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As reported earlier by TheCoinRise, Tesla sold 75% of its Bitcoin holdings after selling 10% of its holdings back in Q2 2021, when the price of Bitcoin recorded a massive upshoot at the time, giving the company a profit of $101 million.

Hypothetical Profit of $300 Million

Musk said that his company sold 75% of its BTC holdings to demonstrate Bitcoin’s liquidity and to bolster its balance sheet amid uncertain financial conditions.

More importantly, if Tesla had retained its BTC holdings, it would’ve garnered a massive profit north of $300 million based on the current price of Bitcoin, which is trading above $42,000. Bitcoin is up 84.1% in the past year, as per CoinGecko.

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Tesla is Not Selling Anymore

The Texas-based company’s Bitcoin holdings have remained unchanged since the past few quarters as it has adopted a more careful approach to digital assets with the upcoming halving and the approval of the eleven spot BTC ETFs by the Securities and Exchange Commission (SEC) in the United States.

Tesla currently has an estimated 9,720 BTC, and as earlier covered by TheCoinRise, these coins have remained untouched for the past few quarters.

Additionally, in a January 31, 2023 report, Tesla confirmed that it had incurred a $204 million gross impairment loss on its Bitcoin assets during 2022.

Elon Musk and Digital Assets

Elon Musk, the founder of Tesla, has been a strong supporter of the digital asset sector and promoted investments in Dogecoin (DOGE), a memecoin that skyrocketed in the 2021 market bull run.

The billionaire has also called out the SEC, asking for a “comprehensive overhaul” of the regulator that had filed a lawsuit against him for his “blanket refusal” to provide testimony in their ongoing investigation.