Tesla's Bitcoin Holdings Surge 14% to $1.2 Billion

Tesla, the electric vehicle company owned by Elon Musk, currently holds 11,900 Bitcoin (BTC), valued at approximately $1.2 billion. This information was revealed by Arkham Intelligence after analyzing blockchain data. Tesla first disclosed its Bitcoin investment strategy in the first quarter of 2021. In a Securities and Exchange Commission (SEC) filing on February 8, 2021, Tesla reported the purchase of 43,200 BTC, valued at around $1.5 billion at the time.

Initially, Tesla implemented various measures to integrate Bitcoin into its operations, including an option to purchase electric vehicles using BTC. However, due to environmental concerns related to Bitcoin's proof-of-work methods, Tesla discontinued this option in May 2021. The company has since been cautious about its cryptocurrency holdings, particularly in light of Bitcoin's reliance on fossil fuels, which contradicts Tesla's commitment to sustainable practices.

Tesla utilizes Coinbase Prime Custody to manage its substantial Bitcoin holdings. The company's interest in cryptocurrencies has been ongoing, but it has had to reassess certain use cases due to environmental concerns. Bitcoin's proof-of-work algorithm requires significant amounts of electricity, much of which is still generated from fossil fuels and coal. There is speculation that Musk may integrate tokens such as Bitcoin and Dogecoin into his businesses in the future. Musk's initial $1.5 billion Bitcoin purchase in 2021 was followed by sales to cover expenses, but the increasing value of cryptocurrencies may prompt a re-evaluation of this strategy.

On April 22, Tesla disclosed that it held 11,509 BTC, valued at around $1.05 billion. The recent rise in Bitcoin's price, reaching an all-time high of $111,000, has increased Tesla's holdings to approximately $1.2 billion. Tesla's fluctuating policy on digital assets may have led to missed opportunities. For instance, in March 2021, Tesla allowed the purchase of electric cars with Bitcoin, but reversed this decision in May 2021 due to environmental concerns. During the first quarter of 2021, Tesla sold 10% of its Bitcoin holdings, generating a $272 million profit. Later, in the second quarter of 2022, Tesla sold 75% of its remaining Bitcoin, leaving 9,720 BTC in its treasury. Musk explained that the sales were necessary to cover the company's expenses. However, if Musk had retained the original 43,000 BTC, Tesla would now have nearly $5 billion worth of Bitcoin.

Other companies also maintain Bitcoin treasuries, providing a comparative perspective to Tesla's approach. For example, Strategy holds 576,230 BTC and made its latest purchase of 7,390 BTC on May 19 for around $764 million. With a Bitcoin price of $111,000, Strategy would own approximately $63 billion. Metaplanet, a Tokyo-listed company, has also been building a significant Bitcoin treasury, recently adding 1,004 BTC to its holdings, falling short of its target of 10,000 BTC by 2,000 BTC.

Governments have also shown interest in Bitcoin treasuries. The approval of a Bitcoin treasury using seized assets from federal investigations has been endorsed by President Trump. Additionally, at the state level, New Hampshire and Texas have approved local treasuries, further boosting the popularity of cryptocurrencies.

The Financial Accounting Standards Board (FASB) has revised the rules regarding digital asset holdings. Previously, public companies were required to use cost accounting methods to list crypto assets, which could severely undervalue the assets if their price dropped. The new changes allow companies to report the fair value of their digital assets, providing a more accurate reflection of their holdings. For instance, when Tesla bought Bitcoin at $30,000, it reported the value of each Bitcoin at $30,000. When the price fell to $15,000, Tesla reported the value of each Bitcoin as $15,000. However, when Bitcoin's value rebounded, Tesla continued to report the value at $15,000. From 2022 to 2024, Tesla reported the same amount of $184 million in Bitcoin holdings, despite fluctuations in the price.