Tesla secured a $600 million profit from its Bitcoin holdings in the fourth quarter of 2024, benefiting from the cryptocurrency’s surge past $109,000.
The electric vehicle company, led by Elon Musk, did not acquire additional Bitcoin during this period but still holds 11,509 BTC, as confirmed in its latest SEC filing.
Bitcoin rally boosts Tesla’s holdings
Arkham Intelligence states Tesla’s Bitcoin holdings are now valued at approximately $1.1 billion. The company initially purchased 39,474 BTC in 2021 for $1.5 billion at an average price of $38,000 per coin. However, it later sold over 70% of its holdings in 2022. The recent price surge significantly increased the value of its remaining assets, leading to substantial unrealized gains.
New accounting rules impact Tesla’s profits
Tesla’s Bitcoin gains were influenced by changes in accounting standards introduced by the Financial Accounting Standards Board (FASB) in December 2024. Under previous rules, companies were required to report digital assets at their lowest value within a financial period, recording losses on paper even if they did not sell. The updated fair-value accounting system now allows companies to report Bitcoin at its actual market value rather than the lowest price it reached during the period.
In its SEC filing, Tesla noted that its “other income (expense), net” improved by $523 million in 2024 compared to 2023 due to the revaluation of Bitcoin. However, the company also experienced unfavorable fluctuations in foreign currency exchange rates, which slightly offset these gains.
FASB rules apply to fungible Crypto assets
The new accounting standards apply to all U.S. companies holding cryptocurrencies, starting with fiscal years after December 15, 2024. These rules only cover fungible digital assets like Bitcoin. Non-fungible tokens (NFTs), wrapped tokens, and internally created digital assets remain excluded. To qualify, assets must be intangible, cryptographically secured, and recorded on a blockchain.
The Bitcoin price rise produced benefits for Tesla’s financial performance but the company continues to avoid Bitcoin payments for car buys. Elon Musk promised the resumption of Bitcoin transactions for Tesla to occur when the cryptocurrency network reached renewable energy levels surpassing 50%. The percentage of renewable energy use in Bitcoin has increased beyond 57% according to recent estimates yet Tesla has not provided any new information about Bitcoin payments.