Bitcoin BTC/USD reached record highs in March 2024, potentially rising further before the 2024 presidential election.
This article reviews Tesla Inc TSLA and its Bitcoin purchase, highlighting the potential returns for investors who followed its lead.
What Happened: Although MicroStrategy took the lead in Bitcoin investments, Tesla made a notable purchase of $1.5 billion in January 2021, announced to investors in February 2021. This purchase significantly boosted Bitcoin’s price.
Tesla later sold $272 million of its Bitcoin holdings in Q1 2021, which positively impacted its profits. In Q2 2022, Tesla sold 75% of its Bitcoin for $936 million.
Currently, Tesla reports $184 million in “digital assets,” including Bitcoin and Dogecoin DOGE/USD, used for online merchandise purchases.
Tesla has the flexibility to adjust its digital asset holdings depending on market conditions and business strategies.
Recent reports suggest Tesla may be moving its Bitcoin to unknown wallets, hinting at potential future sales.
Investing $1,000 in Bitcoin: Following a downturn in 2022, Bitcoin rebounded and hit new highs in 2024, fueled by Bitcoin ETFs and institutional demand.
On Feb. 8, 2021, Bitcoin surged to $46,203.93 after Tesla’s announcement. A $1,000 investment at that price would now be worth $1,468.65, a 46.9% increase.
In contrast, a $1,000 investment in Tesla stock would have fallen to $758.39, down 24.2% during the same period.
While Bitcoin has outperformed Tesla stock since the purchase, it hasn’t done as well as the SPDR S&P 500 ETF Trust SPY, which would be worth $1,491.58 today, up 49.2%.
Investors in Bitcoin have generally fared better than in top stocks and indexes over various time periods, except the day Tesla’s purchase was revealed.
Michael Saylor of MicroStrategy had encouraged Elon Musk to invest in Bitcoin back in December 2020. Had Musk acted then, Tesla’s returns would likely have been even higher.
Bitcoin reached another 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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