Much has been said about the large sum that Tesla Inc. has invested in bitcoin, a speculative asset that has only existed since 2009.
Reading: Why did Tesla buy bitcoin?
However, initial estimates by prominent technology analyst Dan Ives see investment by electric vehicle maker, led by outspoken CEO Elon Musk, already generating a digital paper profit of at least $ 1 billion as the asset price hits records.
“Based on our calculations, we estimate that Tesla has so far made about $ 1 billion in profit in the last month … To put this in perspective, Tesla is on a path to do more with its Bitcoin investments than profits from the sale of its [electric vehicle] cars throughout 2020, ”wrote the prolific Wedbush analyst, Dan Ives, in a note published on Saturday afternoon.
Earlier this month, Tesla Inc. TSLA,
has become the latest and most well-known large corporation to bet on bitcoin, highlighting the growing acceptability of cryptography. The Palo Alto, Calif.-Based company on February 8 in a public lawsuit said it bought $ 1.5 billion bitcoin BTCUSD,
and that he hopes to start accepting payment in cryptocurrency for his products in the future.
Tesla’s move to invest in bitcoin was seen as yet another confirmation of the legitimacy of the nascent asset that didn’t exist until about 12 years ago.
On Friday, the price of bitcoin soared to a record high of around $ 54,000 and exceeded the total market value of $ 1 trillion, further reinforcing the perception of cryptography as a legitimate, if not a nascent, asset.
Output check: Is bitcoin reaching $ 100,000 in 2021 or is its price ‘unsustainable’?
On Saturday, a single bitcoin extended its win to a record $ 57,492, according to CoinDesk. Bitcoin prices have gone up more than 90% so far in 2021, according to data from FactSet. In comparison, GC00 gold,
considered a bitcoin rival, it fell by about 6% in 2021. Meanwhile, the Dow Jones Industrial Average DJIA,
gained almost 3% so far this year, the S&P 500 SPX index,
rose about 4% and the Nasdaq Composite Index COMP,
advanced 7.7% in the same period.
By the way, Tesla’s shares have risen more than 11% since the beginning of the year.
The Wedbush analyst said it is not clear whether Tesla’s bitcoin movement is a feat, in line with Musk’s perception as an iconoclast, but still believes that other companies are likely to be forced to follow suit and exchange part of their money for bitcoins in the future.
“We still expect less than 5% of public companies to follow this path until more regulatory target posts are put into practice in the crypto market, which is clearly beginning to gain greater adoption in 2021 and we believe it will have a seismic impact for blockchain , payments, banks and semis in the coming years, ”wrote Ives.