The adoption of Bitcoin brings in 100 million dollars to Tesla

The relationship between Tesla and “cryptos” is just beginning. In February of this year, the company allocated 1.5 billion dollars for the purchase of Bitcoin and announced that it was accepting this cryptocurrency as a means of payment for its cars, a promise that came true a month later.

One of the objectives of Tesla’s million-dollar investment in Bitcoin is the diversification of its assets. Now, with financial results for the first quarter of 2021, the company led by Elon Musk reaffirms its long-term commitment to cryptocurrencies, despite their volatility.

According to TechCrunch, Tesla CFO Zach Kirkhorn explained last Monday that the company sees Bitcoin as a method to store and access cash immediately. It also considers that cryptocurrency provides a better return on investment than traditional media.

“Elon and I were looking for a method of storing cash that was not used immediately, trying to get some return, but also preserving liquidity (…) thinking about it from a corporate treasury perspective, we are quite satisfied with the amount of liquidity that there is in the bitcoin market ».

Tesla CFO Zach Kirkhorn

Tesla’s position is different from that of the chairman of the US Federal Reserve, Jay powell. He explained in March that they consider cryptocurrencies to be speculative and highly volatile media. Because of that, in their view, they are not considered useful stores of value. Although it is clear that Powell has a conflict of interest.

Tesla makes record profits in the first quarter of 2021

Photo by Manny Becerra on Unsplash

Precisely, the strategy of Tesla against cryptocurrencies has contributed to the good results of the first quarter of 2021, presented last Monday. The firm has announced a quarterly net profit of $ 438 million, setting a new record.

Tesla’s financial report shows that the sale of 10% of their holdings in Bitcoin plus, the sale of vehicles paid in that cryptocurrency have contributed 101 million dollars in income. Likewise, as is customary, the sale of emission credits to other manufacturers that need them to avoid exceeding regulatory limits, they added $ 518 million.

Elon Musk has stated on Twitter that the sale of part of the Bitcoin – worth 272 million dollars during this last quarter – has been to demonstrate the liquidity of that cryptocurrency as an alternative to keeping cash on the balance sheet. In addition, you have stated that you have kept your personal investment.

According to data from Yahoo! Finance, Tesla has a market value of more than $ 700 billion and exceeds the combined value of two automotive industry legends like Ford and General Motors.