Bitcoin (BTC/USD) reached record highs in March 2024, potentially rising further as the 2024 presidential election approaches.
Let’s revisit Tesla Inc (TSLA)‘s investment in Bitcoin and what it means for investors.
Background: Tesla bought $1.5 billion of Bitcoin in January 2021, announced on February 8, 2021. This purchase boosted Bitcoin’s price significantly.
Tesla later sold $272 million worth of Bitcoin in Q1 2021, which positively impacted its profitability.
In 2022, Tesla reported selling 75% of its Bitcoin for $936 million, and currently shows $184 million in “digital assets,” including Bitcoin and possibly Dogecoin (DOGE/USD).
Tesla has indicated it may adjust its digital asset holdings based on business needs and market conditions.
Recent reports suggest Tesla may be moving Bitcoin to different wallets, hinting at a possible sale.
Bitcoin Investment: Bitcoin saw a decline in 2022 due to various economic challenges and the FTX bankruptcy.
In March 2024, Bitcoin reached an all-time high of $73,750.07 after the approval of Bitcoin ETFs stimulated strong demand.
After Tesla’s purchase, Bitcoin’s price jumped to $46,203.93 on February 8, 2021. A $1,000 investment at that time would now be worth about $1,468.65, a 46.9% increase.
In comparison, that same investment in Tesla stock would now be worth $758.39, a 24.2% decrease, and the S&P 500 ETF investment would be worth $1,491.58, a 49.2% increase.
Thus, while Bitcoin has generally performed well since Tesla’s disclosure, it didn’t outperform the S&P 500 on that specific day.
MicroStrategy co-founder Michael Saylor had previously suggested that Elon Musk invest in Bitcoin in December 2020, which could have led to higher returns for Tesla.
This article was brought to you by Benzinga and has been updated.
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