Bitcoin (BTC/USD) reached record highs in March 2024 and may continue to rise before the 2024 presidential election.
Let’s revisit Tesla Inc’s (TSLA) Bitcoin purchase and its impact on investors.
What Happened: Tesla bought $1.5 billion in Bitcoin in January 2021, announced in February. This purchase helped increase Bitcoin’s price, seen as a major move for cryptocurrency.
In Q1, Tesla sold $272 million of its Bitcoin, contributing positively to its earnings with $128 million in gains. In Q2 of 2022, Tesla sold 75% of its Bitcoin, bringing in $936 million.
Recently, Tesla has reported $184 million in “digital assets,” which likely includes Bitcoin and Dogecoin, used for online merchandise purchases. Tesla may change its digital asset holdings based on business needs and market views.
There’s speculation that Tesla is moving its Bitcoin to unknown wallets, which might hint at another potential sale.
Investment Performance: Bitcoin faced challenges in 2022 due to macroeconomic factors and events like the FTX bankruptcy. However, it rebounded, hitting new highs in 2024 following the approval of Bitcoin ETFs.
After Tesla’s February 2021 purchase, Bitcoin rose to $46,203.93, up from $39,621.84 the day before. A $1,000 investment at that peak would now be worth $1,468.65, a 46.9% increase.
In comparison, a $1,000 investment in Tesla would be worth $758.39 today—a 24.2% decrease. Bitcoin has generally outperformed Tesla stock, but not the SPDR S&P 500 ETF Trust (SPY), which would be worth $1,491.58 today, a 49.2% increase.
Despite Bitcoin’s strong performance over time, the period immediately following Tesla’s announcement did not yield superior returns compared to the S&P 500.
Michael Saylor of MicroStrategy encouraged Tesla to invest in Bitcoin back in December 2020, which could have yielded better returns for the company.
Bitcoin hit an all-time high of $73,750.07 on March 14, 2024.
Read Next:
This article was updated from a previous publication by Benzinga.
Market News and Data brought to you by Benzinga APIs
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
`
