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Tesla Made $1 Billion Profit from Bitcoin Investment

February 22, 2021 at 15:10 by Mark Stevenson

Tesla’s $1.5 billion Bitcoin (BTC) investment has already brought in 66.5% revenue, Business Insider wrote about this with reference to Wedbush Securities analyst Daniel Ives.

In early February, the electric car manufacturer announced buying bitcoins in the amount of $1.5 billion. Ives said:

Based on our calculations, we believe that Tesla has received approximately $1 billion in profit from its investment in Bitcoin over the past month.

According to some estimates, at the time Tesla bought the bitcoins, the coin was worth about $38,500, but the exact price at which the company bought the cryptocurrency remains unknown. There is also no reliable information about the purchase amount.

Tesla on the edge of liquidity

That said, Tesla’s investment may be in a precarious position. Earlier, JPMorgan analysts concluded that Bitcoin is experiencing a liquidity crisis. According to experts, the current situation may negatively affect the asset price.

So, analysts believe that the purchase of Bitcoin by Tesla, MicroStrategy, and other corporations strongly affects the liquidity of the cryptocurrency. According to some analysts, the market availability of Bitcoin is “much lower than that of gold or the S&P 500.”

A decrease in Bitcoin in the market leads to an increase in volatility. This means that the value of an asset can change dramatically, even with insignificant cash flows.

At the time of this writing, the BTC/USD trading pair was changing hands at $52,978. Since the morning of February 22, Bitcoin has been experiencing a correction from the highs of February 21, when the cryptocurrency was worth $58,367. Thus, Bitcoin has already dropped by more than down 11% in the last 24 hours.

According to data from Whale Alert, on the eve of the correction, unknown whales withdrew over 17,000 bitcoins worth more than $1 billion. The first major transaction took place at 07:04 GMT. Then Whale Alert announced the withdrawal of 4501 bitcoins worth $254 million from Coinbase.

However, the mass withdrawal of Bitcoin from the exchange began later. From 18:00 to 20:00 GMT, Whale Alert began to systematically report the withdrawals of BTC from the exchange for an average amount of 370 BTC. Thus, the whales have withdrawn a total of 17,705 bitcoins.

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