Tesla’s Bitcoin Holdings Surge Under New Accounting Rules
Tesla has reported a $600 million unrealized gain from its Bitcoin holdings in the fourth quarter of 2024, benefiting from new accounting standards that allow companies to adjust digital asset valuations each quarter.Impact of New Financial Accounting Standards Board (FASB) Rule
Under previous accounting rules, companies had to write down their crypto holdings when values dropped but could not report gains unless they sold. The new FASB rule, effective January 2025, permits companies to revalue their digital assets quarterly at market prices. This change has significantly increased Tesla’s reported Bitcoin holdings value, which grew from $184 million in the third quarter to $1.076 billion by the end of 2024.Bitcoin’s Market Surge Boosts Tesla’s Profits
Bitcoin surged over 50% in the final quarter of 2024, driven by President Donald Trump’s pro-crypto stance following his reelection and strong investor inflows into spot Bitcoin exchange-traded funds. The cryptocurrency repeatedly hit new all-time highs, currently trading at $105,020.Tesla’s Financial Performance and Market Reaction
Despite the reported gains from its Bitcoin holdings, Tesla did not disclose the exact number of BTC it holds in its latest earnings report. However, data from Arkham Intelligence suggests that Tesla owns around 11,509 BTC, with an estimated market value of $1.21 billion. With this increase, Tesla remains the fourth-largest publicly traded Bitcoin holder behind MicroStrategy, Marathon Digital, and Galaxy Digital. Tesla posted a generally accepted accounting principles (GAAP) net income of $2.3 billion for the fourth quarter and a total of $7.1 billion in net income for 2024. Adjusted earnings per share stood at $0.73, slightly below market expectations of $0.76. Tesla’s stock closed down 2.26% at $389.1 on Wednesday, but rebounded 4.15% in after-hours trading as investors responded positively to its growing digital asset valuation.
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