Tesla’s Bitcoin Investment Boosts Fourth Quarter Performance
Tesla’s decision to invest in Bitcoin proved to be a game-changer for the company’s fourth-quarter performance, with the digital asset accounting for a significant portion of its GAAP net income.
New Accounting Standards Lead to Increased Valuation
- Previously, Tesla had to report Bitcoin at the lowest recorded value during its holding period.
- A rule change by the Financial Accounting Standards Board now requires companies to mark digital assets to market each quarter.
- In its Jan. 29 earnings report, Tesla showed a major increase in Bitcoin valuation from $184 million to approximately $1.08 billion.
Bitcoin’s Strong Rally Drives Valuation Increase
The surge in Tesla’s Bitcoin valuation can be attributed to the digital asset’s strong rally in late 2024, with prices surpassing $100,000 for the first time.
- Bitcoin reached an all-time high of $108,000 during this period.
- Market confidence soared after Donald Trump secured reelection as US president, increasing demand for digital assets.
It’s worth noting that Tesla did not disclose its exact Bitcoin holdings in the report, but data from Bitcoin Treasuries suggests the company holds around 9,720 BTC.