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Tesla's Bitcoin Surge: $600M Gain as New Accounting Rule Takes Effect

Coin WorldWednesday, Jan 29, 2025 7:38 pm ET

1min read

Tesla, the electric vehicle manufacturer, has reported a significant gain on its Bitcoin holdings in the fourth quarter of 2024. The company adopted a new accounting rule that allows for the valuation of digital assets at market prices each quarter, resulting in a $600 million gain for Tesla. This gain reflects an adjustment under the new reporting rules, which raised Tesla's reported digital asset value to $1.076 billion from $184 million, the previously impaired value recorded under older accounting rules.

The Financial Accounting Standards Board introduced the new rule update in December 2023, requiring companies to report digital assets at their fair market value rather than at their lowest recorded price since purchase. Tesla has adopted the rule early, ahead of the 2025 deadline, which is required for all entities for fiscal years beginning after December 15, 2024. Previously, Tesla could only report losses if Bitcoin's price declined but was not allowed to record gains unless the asset was sold. Under the new standard, companies can adjust crypto holdings to reflect market movements each quarter, bringing them in line with how stocks and other financial assets are valued.

Tesla's Bitcoin holdings stand at 11,509 BTC, according to Arkham Intelligence data, with its value estimated at $1.19 billion based on current market prices. The electric vehicle maker's Bitcoin holdings remained unchanged from previous quarters, but its value rose significantly from what had been listed as $184 million worth of Bitcoin for several previous quarters. The change in value is due to a rise in the price of BTC and also a new accounting rule that requires the value of Bitcoin and other crypto to be reported using a marked-to-market process. Previously, corporate holders of Bitcoin were required to report their digital holdings at what was their lowest valuation during the time of ownership.

With 11,509 BTC, Tesla remains one of the largest publicly traded Bitcoin holders. Other companies with crypto exposure, such as MicroStrategy and Coinbase, could also see their reported asset values rise under the new accounting rule this year. Tesla reported adjusted earnings-per-share of $0.73, missing Wall Street's estimate of $0.78. Despite the missed earnings, Tesla shares are up 4.3% in after-hours trading to $406.25, as investors react positively to the Bitcoin revaluation

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