Bitcoin BTC/USD reached new all-time highs in March 2024, potentially rising further before the 2024 presidential election.
Let’s review Tesla Inc.’s investment in Bitcoin and what investors might have gained by following their lead.
Tesla’s Purchase: Although MicroStrategy led in Bitcoin holdings since 2020, Tesla bought $1.5 billion worth in January 2021, announced publicly in February 2021.
This significant purchase propelled Bitcoin’s price upward as it was seen as a major milestone for cryptocurrency.
Tesla later sold $272 million of its Bitcoin in Q1 2021, enhancing its profitability.
In 2022, Tesla sold 75% of its Bitcoin, generating $936 million in cash.
Tesla now reports $184 million in “digital assets,” possibly including both Bitcoin and Dogecoin DOGE/USD, which customers can use to buy Tesla goods.
Tesla has stated it can adjust its digital asset holdings based on market conditions.
Recently, Tesla was reported to be moving Bitcoin to unknown wallets, hinting at a possible sale.
Bitcoin Performance:
- Investing $1,000 in Bitcoin: Bitcoin faced declines in 2022 due to macroeconomic issues, including the FTX bankruptcy.
By March 2024, Bitcoin had surged after Bitcoin ETFs received approval, reaching highs of $46,203.93 on February 8, 2021, just after Tesla’s announcement.
A $1,000 investment in Bitcoin at that high could have bought 0.0216 BTC, now worth $1,468.65 (a 46.9% increase).
In contrast, a $1,000 investment in Tesla stock would have dropped to $758.39 (down 24.2%).
While Bitcoin outperformed Tesla stock since the purchase, it lagged behind the SPDR S&P 500 ETF Trust SPY, which would now be worth $1,491.58 (up 49.2%).
Despite Bitcoin’s strong performance over several periods, the timeframe of Tesla’s purchase was not among them.
Michael Saylor of MicroStrategy previously urged Tesla’s Elon Musk to invest in Bitcoin back in December 2020. Had Musk acted then, returns could have been even higher.
Bitcoin achieved an all-time high of $73,750.07 on March 14, 2024.
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This article was first published by Benzinga and has been updated.
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