Elon Musk Defends Tesla Bitcoin as Bitcoin Becomes More Lucrative Than Cars

Tesla CEO Elon Musk defends Tesla's $1.5 billion bitcoin bet as 'adventurous enough' for a S&P 500 company - and says it's less dumb than holding cash. Bitcoin is now more lucrative for Tesla than electric cars.

At the beginning of February, Tesla's Bitcoin Invest caused a stir. The electric car maker had invested 1.5 billion US dollars. That could prove to be more profitable than selling cars in the future.

Tesla struck in January on an unprecedented scale and bought Bitcoin worth $ 1.5 billion at the time. The information was made public via a mandatory disclosure to the US Securities and Exchange Commission .

How many bitcoin did Tesla buy?

Teslas Invest had caused another rapid increase in Bitcoin. Since then, the cryptocurrency has known only known the way up and is around $ 54,879 at the time of this video news report.

The colleagues from Teslarati took the increase as an opportunity to calculate how the value of the investment has developed. Either way, the result is impressive. Especially if we look at Tesla's net operating profit from last year for comparison. That was $ 721 million.

The calculation is made more difficult by the fact that Tesla has not disclosed the average price of the purchased cryptocurrency, nor how many Bitcoins it currently holds. However, after we know the range of fluctuations in prices in January, we can mathematically approximate the values. Bitcoin changed hands in January at prices between $ 29,333 and $ 37,020. Assuming an average, Tesla could have acquired 44,079 Bitcoin this way.

That's how much Tesla's 1.5 billion investment is worth today

At the current Bitcoin rate of $ 51,400, this would result in a value of around $ 2.3 billion. This could mean that Tesla has already drawn around $ 800 million in profit from its investment.

Assuming that Tesla bought closer to the lower end of the range, the company's Bitcoin inventory could be 51,137, a profit of $ 1.1 billion. Even in the worst and at the same time most unlikely case, namely that Tesla could have bought at the highest January price and only secured 37,020 Bitcoin, the profit would be over $ 400 million.

How will Tesla use the profit potential?

Realistically, we can probably assume the average, i.e. an increase of $ 800 million. In the course of the announcement of the investment, Tesla had indicated that it was about the most effective possible use of otherwise unused capital. It is therefore quite likely that Tesla's Bitcoin strategy is not geared towards the long term, but rather towards realizing profits in the short term.

Tesla is building on the successes of the previous year on a completely new stage. Despite the corona pandemic, the company managed to deliver half a million vehicles in 2020 and generate its first corporate profit.

#ElonMusk
#Tesla
#Bitcoin

Join this channel to get access to perks:
https://www.youtube.com/channel/UCe9o5o8JnpzLH0jWQ1r4opw/join

Reference
T3N https://t3n.de/news/bitcoin-fuer-tesla-lukrativer-1356461/