Electric vehicle maker Tesla reported a $600-million gain from its Bitcoin (BTC) holdings in the fourth quarter of 2024, thanks in part to new accounting rules that allow companies to record the market value of their digital assets. Crypto executives say the new accounting rules unlock new opportunities for companies seeking to access working capital using their digital assets as collateral.
Tesla’s Bitcoin gambit
Tesla’s foray into digital assets began in January 2021 when it acquired $1.5 billion worth of Bitcoin, sparking both praise and criticism from the investment community.
Although the company has since sold off more than 70% of its Bitcoin portfolio, it still holds 9,720 BTC at a current value of $946 million. This makes Tesla the sixth-largest corporate holder of Bitcoin, according to industry data.
Tesla remains one of the world’s largest corporate BTC holders. Source: BitcoinTreasuries.NET
Tesla CEO Elon Musk initially claimed that he sold BTC to demonstrate the asset’s liquidity and bolster the company’s balance sheet during periods of uncertainty. However, in doing so, Tesla missed out on billions of dollars in capital gains.
With Bitcoin trading north of $97,000, the company’s initial purchase of 39,474 BTC would be valued at roughly $3.8 billion today.
Related: Crypto Biz: SEC cleans up Gensler-era mess
Tesla was ahead of its time
Tesla’s Bitcoin purchase came three years before new accounting rules made it easier for corporations to hold cryptocurrencies on their balance sheet.
In December 2023, the US Financial Accounting Standards Board (FASB) finalized rules that would allow corporations to reflect crypto assets’ fair value, or estimated market value, on their books.
Previously, the value of crypto assets held on corporate balance sheets would fall if their price declined during an accounting period, and the recorded value could not be increased until the assets were liquidated.
The new FASB rules for crypto assets came into effect in December 2024. As Cointelegraph previously reported, the new accounting rules would greatly benefit corporate Bitcoin treasuries starting in…
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