Bitcoin (BTC/USD) hit new highs in March 2024, possibly rising further before the 2024 presidential election.
This retrospective covers Tesla Inc (TSLA) and its Bitcoin investments.
Background: While MicroStrategy invested heavily in Bitcoin in 2020, Tesla joined in January 2021, announcing a $1.5 billion purchase on Feb. 8, 2021.
Tesla’s announcement boosted Bitcoin prices, considered a milestone for cryptocurrency.
Tesla later reported selling $272 million of Bitcoin in Q1 2021, contributing positively to its profits.
In 2022, Tesla sold 75% of its Bitcoin for $936 million.
Currently, Tesla lists $184 million in “digital assets,” possibly including both Bitcoin and Dogecoin (DOGE/USD), which can be used for merchandise at Tesla’s online store.
Tesla stated it could adjust its digital asset holdings as needed, and recent reports suggest it may be moving Bitcoin around, hinting at potential sales.
Since Tesla’s investment, Bitcoin’s performance has been notable.
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Investing $1,000 in Bitcoin: Bitcoin faced declines in 2022 but reached new highs in 2024 after Bitcoin ETF approvals spurred demand.
Bitcoin peaked at $46,203.93 on Feb. 8, 2021, after Tesla’s purchase, up from $39,621.84 the day before.
Investing $1,000 at its high could have bought 0.0216 BTC, now worth $1,468.65 (46.9% increase).
Conversely, an investment in Tesla would now be worth $758.39 (24.2% decrease).
While Bitcoin has outperformed Tesla stock since Tesla’s announcement, it lags behind the SPDR S&P 500 ETF Trust (SPY), which would be worth $1,491.58 today (49.2% increase).
In summary, those who opted for Bitcoin have outperformed many top stocks and indexes, except on the day of Tesla’s purchase announcement.
MicroStrategy’s co-founder, Michael Saylor, had urged Elon Musk to invest in Bitcoin earlier in December 2020, which could have led to even better returns.
Bitcoin reached an all-time high of $73,750.07 on March 14, 2024.
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This article was previously published by Benzinga and has been updated.
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