Key Takeaways:
- Tesla reported a $600 million Bitcoin profit in Q4 2024, aided by new accounting rules.
- The company still holds 11,509 BTC, currently valued at $1.1 billion.
- New FASB rules allow firms to reflect fair value for crypto holdings, benefiting corporate treasuries.
Tesla recorded a $600 million gain from its Bitcoin holdings in the fourth quarter of 2024, capitalizing on new accounting rules that permit companies to report the market value of their digital assets. The electric vehicle giant, which initially invested $1.5 billion in BTC in 2021, now holds 11,509 BTC, valued at approximately $1.1 billion.
While it has offloaded over 70% of its original Bitcoin investment, Tesla’s decision to retain a portion of its investment has been lucrative. If the company still held on to its entire BTC purchase, its investment would be worth around $3.8 billion today. Elon Musk previously justified BTC sales as a move to demonstrate liquidity and strengthen Tesla’s balance sheet.
Accounting Rule Change Boosts Corporate Bitcoin Holdings
In December 2023, the US Financial Accounting Standards Board (FASB) finalized rules allowing companies to account for cryptocurrency holdings at their fair market value, an alteration that took effect in December 2024. Previously, companies were required to carry BTC at its lowest historical price, which concealed unrealized gains.
Crypto executives are hopeful that the new accounting rules will have the impact of convincing more companies to keep Bitcoin as a treasury reserve. Gadi Chait at Xapo Bank explained that marking digital assets to market value eliminates the concern of BTC being an idle holding. John Glover at Ledn explained that this transparency makes it easier for corporations to keep Bitcoin on their balance sheets.
Bitcoin as a Treasury Asset Gains Traction
With BTC trading above $97,000, the approval of spot Bitcoin ETFs has further legitimized its role in corporate treasuries. These ETFs, which now hold nearly $116 billion in total assets, offer companies new avenues to gain exposure to BTC without direct purchases.
Glover said that fair accounting rules enable companies to borrow against BTC holdings instead of selling them, keeping exposure to upside potential. Corporate treasuries are now using Bitcoin to generate returns, with lending producing a 3% to 4% yield.
With growing institutional demand for Bitcoin, Tesla’s profitable BTC investment reflects the shifting perception of digital assets in corporate finance. The new accounting rules, along with the growing utilization of BTC ETFs, may pave the way for other companies to carry cryptocurrency on their balance sheets.
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