• Elon Musk’s Tesla has increased its Bitcoin investment by more than $1 billion

  • Tesla is now more than $1 billion in the black on its Bitcoin investment, as the price approaches $58,000 for the first time since early May.

    Tesla is now more than $1 billion in the black on its Bitcoin investment, as the price approaches $58,000 for the first time since early May.

    At the time of writing, Tesla had 42,902 BTC, which was worth nearly $2.5 billion. When the company first added Bitcoin to its balance sheet in February, it purchased approximately $1.5 billion in Bitcoin.

    Tesla sold 10% of its Bitcoin holdings in Q2 at an average price of around $50,000 per token. Elon Musk later clarified on Twitter that Tesla sold 10% of its BTC holdings to demonstrate the asset’s liquidity and viability as an alternative to cash on its balance sheet.

    Tesla reported $128 million in profits from its Bitcoin sale in its Q2 earnings report.

    Since its initial Bitcoin investment, the carmaker has gained approximately 65 percent, or $1 billion. This is the same as its profit from selling 201,250 vehicles in the second quarter. Companies that aren’t investment firms, such as Tesla, currently report Bitcoin as intangible assets. This means that Bitcoin is recorded on balance sheets at its historical cost and then impaired if its value falls. Although the value can never be increased if the price of Bitcoin rises.

    “This disconnect between an entity’s financial statements and the economic reality of its financial condition and results of operations creates confusion and fails to provide investors, analysts, and the general public with the information they need to make an informed assessment of an entity’s current and future prospects,” Michael Saylor’s MicroStrategy recently wrote to the Financial Accounting Standards Board.

    The question is not whether, but when, other large corporations will follow MicroStrategy, Tesla, and Square’s lead and include Bitcoin on their balance sheets.

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