Tesla books $600 million boost from Bitcoin after accounting change
Tesla Inc.'s holdings of Bitcoin gave its latest quarterly results a boost, courtesy of new accounting rules for digital assets.
Its net income got a $600 million mark-to-market benefit from the digital tokens due to the adoption of the accounting approach, Chief Financial Officer Vaibhav Taneja said on Tesla's earnings call on Wednesday.
The electric vehicle maker's fourth-quarter adjusted earnings were 73 cents a share, missing analysts' average estimates of 75 cents. But investors took heart from the Elon Musk-led firm's plan to begin robotaxi operations and forecast of a sales recovery this year, driving its shares up in extended New York trading.
Tesla revealed an aggregate $1.5 billion investment in Bitcoin back in 2021, during an earlier boom in crypto prices. Its latest quarterly update lists a net $1.08 billion worth of digital assets on its balance sheet.
Financial Accounting Standards Board regulations requiring companies to record digital assets at fair value go into effect this year, but earlier adoption is permitted.
The rules, published at the end of 2023, are intended to capture the most up-to-date value of digital assets which are notoriously volatile. The outgoing practice only let companies record lower valuations, and businesses that bet on Bitcoin bemoaned such one-sided accounting treatment.
The crypto market is in the midst of a renewed boom prompted by US President Donald Trump's pledge of supportive regulations. The value of Bitcoin more than doubled over the past year and a hit a record $109,241 on Jan. 20 before slipping back. Bitcoin rose about 1.4% to $105,150 on Thursday.
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