Win McNamee/Getty ImagesSummary List Placement
- Tesla has made roughly $1 billion on its bitcoin investment, according to Wedbush analyst Dan Ives.
- The electric-vehicle maker is set to make more from bitcoin than profit from car sales in 2020, he said.
- Wedbush expects less than 5% of public companies to head down the same route.
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"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," Ives wrote in a note published Saturday.
The company "is on a trajectory to make more from its Bitcoin investments than profits from selling its EV cars in all of 2020," he added.
Earlier this month, the electric-car maker disclosed an investment of $1.5 billion in bitcoin and said it would soon begin to accept the digital asset as payment for its products. Following the announcement, bitcoin has surged almost 72% and its market value hit $1 trillion for the first time. The token has now crossed an all-time high of $57,000, but was trading lower around $55,863 on Monday.
Tesla made its bitcoin purchase in January, when the price was fluctuating between $30,000 to $40,000, but the company didn't specify when, or at what price, it bought the token. It remains unclear whether Tesla has sold any bitcoin.
"While the Bitcoin investment is a side show for Tesla, its 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," Ives said in the note. But the analyst expect less than 5% of public companies to head down the same route until more clarity around crypto regulations are determined.
Tesla founder Elon Musk has been on a consistent tweeting spree about bitcoin, most recently saying it's a "less dumb form of liquidity than holding cash." On Saturday, he said the price of bitcoin "seems high" after its market value surpassed $1 trillion.
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