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Tesla Reports $600M Bitcoin Profit in Q4 Using New Accounting Rule

Using the new accounting rule, Tesla recorded 600 million profit on its Bitcoin holdings in the fourth quarter of 2024.

Tesla

Electric car manufacturing company Tesla has reported an impressive $600 million profit on its Bitcoin holdings in the fourth quarter of 2024. This is due to a new rule from the Financial Accounting Standards Board (FASB) which requires companies to record the market value of their crypto holdings on their books.

Tesla Records $600M Profit on Bitcoin Holdings 

Released on January 29, Tesla’s Q4 earnings show that the firm valued its 9,720 bitcoins at a whopping $1.076 billion as of the end of 2024. This figure is a significant increase from $184 million recorded in prior quarters. 

Under the new FASB rule that came into effect in mid-December, corporate holders of crypto are required to use the estimated market value of crypto assets on their balance sheets each quarter starting from the beginning of 2025. The FASB sets accounting and reporting standards for U.S. Generally Accepted Accounting Principles (GAAP). 

Before the FASB rule change, companies owning bitcoin had to report their holdings at the lowest value recorded during their ownership, regardless of any subsequent price gains. Following the new rule, Tesla reported an overall GAAP income of $2.3 billion in Q4, boosted by the $600 million from its Bitcoin holdings.

The increase in Bitcoin’s market value contributed to the company’s profits. Moreover, as per its earnings release, Tesla did not sell any Bitcoin in Q4. The firm’s chief financial officer, Vaibhav Taneja, stated: 

“It’s important to point out that the net income in Q4 was impacted by a $600 million mark-to-market benefit from bitcoin due to the adoption of a new accounting standard for digital assets”.

Influence of U.S. Presidential Election 

According to data from Bitcoin Treasuries, Tesla currently holds 9,720 BTC, making it the sixth-largest publicly traded company to hold the leading cryptocurrency on its balance sheet. Tesla’s BTC stash benefited from the significant price uptick the leading cryptocurrency experienced last November following Donald Trump’s victory in the US presidential election. 

Despite the boost in profits recorded from its Bitcoin holdings, Tesla’s fourth-quarter earnings and revenue fell short of analysts’ expectations as auto revenue dropped 8% from a year earlier.

Faith

Faith is a dedicated content writer who is focused on expanding her interest and knowledge about cryptocurrencies and blockchain technology. In her free time, she enjoys listening to music, reading, and traveling.