February 6, 2025

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After digital assets rule change, Tesla’s profit from bitcoin soars to $600 million

Tesla reports $600 million bitcoin profit jump after digital assets rule change

Back in June, Musk had mentioned that he was starting to lean towards supporting DeSantis for president in 2024.

Joe Skipper | Reuters

Tesla‘s bitcoin holdings resulted in a significant increase in reported net income for the fourth quarter due to a new rule change in accounting for digital assets.

From reporting a value of $184 million for digital assets in the previous four quarters, the amount suddenly rose to $1.08 billion in the December period, as per Tesla’s earnings release on Wednesday.

The increase was a result of a recent policy change by the Financial Accounting Standards Board, requiring corporate digital asset holdings to be marked to market each quarter starting in 2025. Prior to the FASB rule change, companies holding bitcoin had to report their holdings at the lowest value recorded during their ownership, irrespective of any subsequent price increase.

Tesla mentioned in its earnings presentation that the alteration led to a 68 cents boost in earnings per share for the quarter, with CFO Vaibhav Taneja noting during the earnings call that the net income increase was $600 million.

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

By the end of the third quarter, Tesla’s bitcoin holdings were valued at $184 million, though their fair market value stood significantly higher at $729 million. This indicates that the actual increase in the value of its holdings during the period was around $347 million, representing bitcoin’s rally in the fourth quarter.

A significant portion of bitcoin’s recent surge is associated with optimism surrounding the potential second Trump administration, which received strong support from the crypto industry. Elon Musk, CEO of Tesla, was a major financial supporter of Trump and is now a key advisor in the White House. David Sacks, a long-time ally of Musk, was chosen by Trump to be the White House AI and crypto czar.

According to Bitcoin tracking website Bitcoin Treasuries, Tesla is ranked as the sixth-largest holder of bitcoin among public companies.

While Tesla’s fourth-quarter earnings and revenue fell below analysts’ expectations on Wednesday with auto revenue declining by 8% from the previous year, the stock saw an increase in after-hours trading.

— CNBC’S Lora Kolodny contributed to this report.

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