Tesla (TSLA) is benefiting from its investment in Bitcoin, which now surge past $600 million as the cryptocurrency tests new highs.
Tesla is one of the few large public companies to decide to invest some of its cash into cryptocurrency.
Early in 2021, Tesla invested $1.5 billion in Bitcoin. Shortly after, the automaker started accepting the cryptocurrency as payment on new vehicles.
However, a few days later, Tesla took a step back with crypto by removing the Bitcoin payment option. The company noted concerns over the energy needs of the Bitcoin network:
Tesla has suspended vehicle purchases using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
This is a concern that many Tesla community members shared when Tesla first announced its Bitcoin investment, and many were angered by the fact that the company didn’t think about it in the first place.
At the time, Tesla noted that they were not selling their stake in Bitcoin and that they planned to resume taking Bitcoin payments once the network showed a higher mix of renewable energy.
Last year, Tesla made some moves that pointed to starting to take Bitcoin payments again, but it has yet to happen.
A year after the initial investment, Tesla’s Bitcoin holding increased to $2 billion, but the cryptocurrency lost a lot of its value in 2022 and the automaker’s position suffered – though the automaker also divested about 75% of its Bitcoin position during that time.
Tesla reported over $1.2 billion in proceeds from selling Bitcoins, but the automaker still sits on a good amount.
According to Bitcoin Treasuries, Tesla still has 9,720 Bitcoins – the third largest holding of any public companies:
| Name | Symbol | Market Cap | Ent. Value | Bitcoin | Cost Basis | Current Value | NgU | /M.Cap | /21M |
|---|---|---|---|---|---|---|---|---|---|
| Microstrategy, Inc. | MSTR | $22,134.89M | $20,522.55M | ₿ 193,000 | $6,087.99M | $12,938.44M | 2.13x | 58.45% | 0.919% |
| Marathon Digital Holdings | MARA | $6,305.85M | $7,195.09M | ₿ 15,741 | ? $1,056.90M | $1,055.25M | — | 16.73% | 0.075% |
| Tesla, Inc. | TSLA | $609,122.65M | $626,819.92M | ₿ 9,720 | $337.50M | $651.61M | 1.93x | 0.11% | 0.046% |
| Coinbase Global, Inc. | COIN | $54,201.79M | $47,771.27M | ₿ 9,480 | $117.00M | $635.53M | 5.43x | 1.17% | 0.045% |
| Hut 8 Mining Corp | HUT | $792.66M | $1,022.38M | ₿ 9,195 | ? $617.38M | $616.42M | — | 77.77% | 0.044% |
| Block, Inc. | SQ | $47,857.82M | $48,616.77M | ₿ 8,027 | $220.00M | $538.12M | 2.45x | 1.12% | 0.038% |
| Riot Platforms, Inc. | RIOT | $3,595.19M | $3,086.07M | ₿ 7,648 | ? $513.51M | $512.71M | — | 14.26% | 0.036% |
| CleanSpark, Inc. | CLSK | $3,543.40M | $3,503.44M | ₿ 4,218 | ? $283.21M | $282.77M | — | 7.98% | 0.020% |
| Galaxy Digital Holdings Ltd | GLXY | $3,538.84M | $378.78M | ₿ 4,000 | ? $268.57M | $268.15M | — | 7.58% | 0.019% |
| Bitcoin Group SE | ADE | $224.93M | $197.25M | ₿ 3,589 | $11.79M | $240.60M | 20.41x | 106.97% | 0.017% |
Bitcoin is currently surging in value. It’s up 55% over the last month.
It resulted in Tesla’s Bitcoin holdings surging in value to over $650 million.
Bitcoin is currently surging in anticipation of the next halving, which is expected in mid-April. The halving slashes the mining reward in half, reducing the pace of new Bitcoin entering the blockchain.
Electrek’s Take
Top comment by Doug T
Crypto mining uses about 2% world electricity. It is a large contributer climate change.
For comparison, EVs use about 0.5% of the global electricity production
Tesla should not be involved in crypto
It will be interesting to see what Tesla does with crypto in the coming months. Will it take profits and sell its holdings? Will it double down and start taking crypto payments for its vehicles again?
Bitcoin mining has made progress in using renewable energy, which was Tesla’s main concern in 2021.
With the halving coming and general frustration with monetary policies amid ridiculous levels of inflation, it looks like more people are turning to crypto. In many ways, it has become mainstream, but it has yet to be widely adopted by large companies – hence why it’s interesting that Tesla has the third biggest bitcoin holdings of any public company.
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