Key Takeaways
- Tesla's bitcoin holdings have risen to $1.24 billion amid a market rally.
- Selling 75% of its bitcoin in 2022 cost Tesla billions in missed gains.
- Bitcoin's rebound and policy shifts have boosted digital asset profits for Tesla.
Tesla’s latest earnings report reveals that the company’s digital asset holdings, primarily in bitcoin, have surged in value to $1.24 billion, up from $722 million just a year ago.
This increase is driven by bitcoin’s remarkable rally, with the price climbing more than 80% over the past year and now trading near all-time highs.
Early bitcoin investment and missed gains
In early 2021, Tesla invested $1.5 billion in bitcoin, citing its “long-term potential” and a desire to “diversify and maximize returns on our cash.”
However, in mid-2022, Tesla sold about 75% of its bitcoin holdings as both equity and bitcoin markets were falling sharply.
If Tesla had held on to its full stake, that position would now be valued at around $5 billion, compared to the current $1.24 billion.
The $936 million in bitcoin the company sold would today be worth more than $3.5 billion.
For a detailed view of Tesla’s bitcoin holdings over time, see the Tesla bitcoin treasury tracker.
Impact on earnings
Despite missing out on larger potential gains, Tesla’s remaining bitcoin holdings contributed $284 million in profit during the second quarter, a notable boost during a challenging period for its core electric vehicle business.
The company’s net income for the quarter totaled $1.17 billion, with bitcoin profits helping offset declining auto revenues.
Musk’s bitcoin stance quiets
While Tesla CEO Elon Musk was once vocal about his enthusiasm for bitcoin, he has been largely silent on the topic in recent years.
In March 2022, shortly before the company’s major bitcoin sale, Musk stated:
“I still own & won’t sell my Bitcoin, Ethereum or Doge fwiw.”
Tesla’s experience highlights both the volatility of bitcoin and the significant impact that timing can have on corporate treasury outcomes.
