Investing in Bitcoin is already paying off for US automaker Tesla, according to Wedbush Securities analyst Daniel Ives, who estimated that the company had already made around $1.5 billion in paper profits from its investment. In January, the company announced that it had purchased €2020 billion worth of Bitcoin in an attempt to "further diversify and maximize returns" on its cash. Tesla has also said that it will begin accepting cryptocurrency as payment for its electric vehicles on a limited basis in the future. In a recently released memo shared with CNBC, Ives explained that Tesla's investment is already paying off and that other state-owned companies can do the same when it comes to diversifying their holdings, saying, "Tesla is on a trajectory to do more of its Bitcoin investments than the profits from the sale of its EV (electric vehicle) cars throughout 12. While the Bitcoin investment is a side show for Tesla, it is clearly a good initial investment and a trend that we hope will continue. this will have a ripple effect on other public companies over the next 18 to XNUMX months. "
The rise of Bitcoin
Throughout the past year and into early 2021, Bitcoin experienced a huge rally as the price of a coin rose from €7,347 in January 2020 to a recent high of €57,489 on February 21 of this year. In fact, Bitcoin's market value recently hit €1 billion for the first time and so far the cryptocurrency is up 94% since the beginning of the year. Although Ives did not explain how he arrived at his calculations when it came to Tesla's investment in Bitcoin already reaching €1 billion, according to CoinDesk data, the cryptocurrency went from a high of €34,793 on Jan. of €31 on February 57,487, which was the day he posted his rating. Although Tesla CEO Elon Musk has been a strong supporter of Bitcoin and even Dogecoin online, in a recent series of tweets he compared cryptocurrencies to fiat currencies, saying: “Tesla's action does not directly reflect my opinion. Holding Bitcoin, which is simply a less stupid form of liquidity than cash, is pretty adventurous for an S&P20 business. To be clear, I am *not* an investor, I am an engineer. I don't even own any publicly traded stock other than Tesla. However, when fiat money has negative real interest, only a fool wouldn't look elsewhere. Bitcoin is almost as good as fiat money. The key word is "almost". " Only time will tell if other big companies decide to follow in Tesla's footsteps, but so far his decision to invest in Bitcoin has paid off. Via CNBC