Here's how much Tesla would have made on Bitcoin if it had been HODLed

Here's how much Tesla would have made on Bitcoin if it had been HODLed

Tesla Inc., led by CEO Elon Musk, has continually sought new ways to innovate and utilize the latest technologies. This has manifested itself in many ways, from autonomous driving to commercial solar panels. However, a less discussed example of Tesla's use of novel technologies is Bitcoin investments.

Musk is a well-known supporter of cryptocurrencies, constantly posting about cryptocurrencies on social media and accepting some forms of cryptocurrencies as payment for Tesla goods. However, in 2021, Musk walked his talk and made a then-unprecedented investment in Bitcoin (BTC).

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In February 2021, Tesla spent $1.5 billion to purchase around 43,000 BTC at an average price of around $38,000. Tesla used the extra money to make the purchase and earn some return, citing low interest rates and high inflation.

After the investment was announced, the price of Bitcoin quickly rose to almost $50,000, and Tesla's Bitcoin holdings were worth up to $2.65 billion as of mid-March 2021. At the end of March, BTC rose as high as $60,000, prompting Tesla to sell part of its positions. Tesla sold 10% of the position, or 4,320 BTC, allowing the company to raise approximately $250 million.

The company did not take any further action with its Bitcoin holdings until June 2022. Between March 2021 and June 2022, the company held almost 39,000 BTC, and the value of the position fell to just $875 million in June 2022.

At this point, Tesla sold a majority of its BTC. 29,160 BTC were sold at an average price of around $20,000. According to Musk, the sale served several purposes, such as proving that BTC can handle large transactions and providing Tesla with additional cash in the event of a recession.

The sale came at one of the worst times ever. Bitcoin hit its lowest level in 18 months shortly after the sale, but has gained over 350% in the subsequent 16 months.

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In 2024, the price of Bitcoin rose to $73,750. Had Tesla withheld its original investment of 43,200 BTC, it would have been worth nearly $3.2 billion at its peak in 2024. This is a gain of more than 100% or $1.55 billion. Instead, Tesla holds less than 10,000 BTC, worth around $700 million.

By owning the tokens, Tesla would not have had to pay capital gains tax when it first sold Bitcoin in March 2021.

Although Tesla may have had some bad trades in Bitcoin, the price has since risen so much that the cumulative profits and losses from its BTC trades are close to 0. If BTC continues to rise, Tesla could be back in the green.

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This article showing how much Tesla would have made on Bitcoin if it had been HODLed originally appeared on Benzinga.com

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