Photo: PA Images
It has been revealed that car company Tesla has made more profit from its 2021 investments in cryptocurrency Bitcoin than it has from all of its car sales in 2020 combined.
The company, owned by the world's richest man, Elon Musk, purchased $1.5 billion of the cryptocurrency in February this year, which resulted in the cryptocurrency gaining in price. This means that if Tesla has held on to all the Bitcoin it purchased, it will have made more than $930 million in profit. Last year car sales brought in Tesla just around $72 million in profit.
The current rate for 1 Bitcoin is $56,000, an all-time high.
Tesla's overall stock price has also risen, meaning that it is now valued higher than financial giants Mastercard and Visa combined.
Musk tweeted:
"Having some Bitcoin, which is simply a less dumb form of liquidity than cash, is adventurous enough for an S&P500 company."
Dan Ives, an equity analyst at Wedbush Securities, said of the huge profits:
"Based on our calculations, we estimate that Tesla so far has made roughly $1 billion of profit over the last month from its Bitcoin investment given the skyrocketing price of Bitcoin, which now tops a trillion of market value. Tesla is on a trajectory to make more from its Bitcoin investments than profits from selling its EV cars in all of 2020."
"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."
Simon Peters, a cryptocurrency analyst at eToro, told The Independent newspaper, that:
"Despite being criticised only this week as a bubble waiting to burst and an economic sideshow, it has yet again proved its detractors wrong… today's milestone demonstrates Bitcoin's growing power as it looks to disrupt the traditional financial landscape."
Tesla is not the only major business that is delving into the world of cryptocurrency and Bitcoin. The Bank of America has revealed that it is opening up a cryptocurrency unit helping individuals invest wisely in the new technological and financial phenomenon, and US bank Morgan Stanley has stated it too will be looking to make large investments into Bitcoin. How long the Bitcoin price will rise in the long-term remains to be seen, but the fact that major financial institutions and senior business-people are backing the cryptocurrency bodes well for it. Some analysts have even predicted the price could rise as high as $100,000 or $200,000 per Bitcoin.
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