Tesla, the largest manufacturer of electric vehicles earned $101 million profit after it sold 10 percent of its bitcoin holdings between January and March.
The company said this at an earnings’ call on Monday. The company is the first auto company to embrace bitcoin and appoint a Master of Coin to oversee its crypto assets.
Tesla made a total of $438 million in net income for the quarter, with a $101 million “positive impact” on profits from Bitcoin in the first quarter of 2021. That is less than a month since it took a position in the market.
The auto manufacturer had announced an investment of $ 1.5 billion in Bitcoin. In a filing with the Securities and Exchange Commission, the company said it bought the bitcoin for “more flexibility to further diversify and maximize returns on our cash.”
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“Elon and I were looking for a place to store cash that wasn’t being immediately used, trying to get some level of return on this, but also preserve liquidity,” Zach Kirkhorn, Tesla’s chief financial officer – and “master of coin” – said on the earnings call.
Kirkhorn also cited the extremely low rate of return that conventional cash-like investments are offering at the moment.
The price of bitcoin soared to a new all time high in March when it reached over $64,000, before retreating to below $ 50,000 in the great part of April. The price has recovered slightly at time of press to $54,973.
Tesla has also brought in significant revenue as a result of initiatives designed to boost electric vehicles. When other automakers don’t produce enough zero- emissions vehicles to meet government requirements, they pay Tesla for “regulatory credits” that allow them to count Tesla’s battery powered vehicles against their own quotas.
The company could become an interesting test case for corporate bitcoin ownership. In the meantime, it said it will continue to allow customers to make deposits and complete the purchases of its cars in bitcoin, and Musk has said that Tesla will hold that bitcoin.
