Bitcoin (BTC/USD) reached new highs in March 2024, with potential for more gains ahead of the 2024 presidential election.
Let’s look back at Tesla’s purchase of Bitcoin and what investors might have gained by following their lead.
Background: Although MicroStrategy was a pioneer in adding Bitcoin to its balance sheet in 2020, Tesla made a significant purchase in January 2021, disclosed to investors in February 2021.
Tesla announced on February 8, 2021, that it bought $1.5 billion in Bitcoin, which boosted Bitcoin’s price that day as a major event for cryptocurrency.
Tesla later reported selling $272 million of its Bitcoin in the first quarter, contributing positively to its profits with $128 million from Bitcoin sales.
In 2022, Tesla sold 75% of its Bitcoin, bringing in $936 million in cash.
Today, Tesla shows $184 million in “digital assets” on its balance sheet, likely including Bitcoin and Dogecoin (DOGE/USD), which can be used for Tesla merchandise.
Tesla has stated that it could adjust its digital asset holdings based on business needs and market conditions.
Recent reports suggest Tesla might be moving its Bitcoin to unknown wallets, possibly indicating a future sale.
Performance of Bitcoin:
- Investing $1,000 in Bitcoin: Bitcoin faced declines in 2022 due to economic issues and the bankruptcy of FTX.
In March 2024, Bitcoin reached a high of $73,750.07, fueled by Bitcoin ETF approvals leading to increased institutional investments.
After Tesla’s announcement on February 8, 2021, Bitcoin’s price surged to $46,203.93 from $39,621.84 the day before.
A $1,000 investment in Bitcoin in February 2021 (at its peak) bought 0.0216 BTC, which is now worth about $1,468.65, a 46.9% increase.
If that $1,000 had been invested in Tesla stock, it would now be worth $758.39, down 24.2%. In contrast, a $1,000 investment in the SPDR S&P 500 ETF Trust (SPY) would be worth $1,491.58, up 49.2%.
While Bitcoin has outperformed many stocks, it has not done as well as the S&P 500 since Tesla disclosed its Bitcoin investment.
Had Elon Musk followed the advice of MicroStrategy’s co-founder Michael Saylor to invest in Bitcoin before December 2020, Tesla could have achieved even greater returns.
Bitcoin’s all-time high of $73,750.07 was recorded on March 14, 2024.
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This article was updated and originally published by Benzinga.
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