The Strategist

Tesla's earnings from Bitcoin exceed revenue from electric car sales

02/23/2021 - 04:36

Tesla, which bought $1.5 billion worth of bitcoins a month ago, has already earned more from them than it did from selling electric cars for all of 2020. The carmaker has no plans yet to record profits from the cryptocurrency, whose value is considered exorbitant by the company chief Elon Musk.

Marcus Zacher
Marcus Zacher
It notes that Tesla bought 48,000 bitcoins worth $1.5 billion in January, which have now reached a value of $2.58 billion. That means the cryptocurrency has brought the automaker about $1.08 billion in just one month.

By comparison, Tesla earned $721 million from selling electric cars throughout 2020. Thus, investing in Bitcoin turned out to be more profitable for the company than its main business, The Times also notes.

The carmaker is not going to record any profits from the rise in the price of the cryptocurrency. Bitcoins will be accounted for as an intangible asset with an indefinite life until the company decides to sell them.

Earlier, Tesla CEO called the company's investments in Bitcoin risky and hinted that the decision to purchase $1.5 billion in cryptocurrency was not made by him. According to the billionaire, investing in Bitcoin is a rather risky strategy for an S&P 500 company.

Musk later explained that cryptocurrency, like conventional money, is "a data set to avoid the inconvenience of barter exchange". In this regard, the Tesla CEO considers the value of Bitcoin to be somewhat inflated.