[Asia Economy Reporter Yujin Cho] Tesla, the American electric vehicle company led by Elon Musk, has reportedly gained unrealized valuation gains equivalent to its quarterly net profit from the rebound in Bitcoin prices.
According to cryptocurrency exchange Coinbase on the 14th (local time), Bitcoin briefly surpassed $58,000 the previous day. Based on Tesla's current Bitcoin holdings of 43,200 coins, the total value of Tesla's Bitcoin holdings amounts to $2.5 billion.
Compared to the purchase price of $1.5 billion in February, the unrealized valuation gain reaches $1 billion (approximately 1.18 trillion KRW). This is similar in scale to Tesla's net profit earned in the second quarter.
Tesla recorded a quarterly net profit of $1.14 billion for the first time ever, supported by strong local vehicle sales in China in the second quarter.
However, under U.S. accounting standards, Bitcoin valuation gains are classified as intangible assets and are not reflected in third-quarter earnings. If Bitcoin prices rise above the purchase price, the gains are only recognized in the books as profit when the intangible asset Bitcoin is actually sold and the sales profit is realized.
Conversely, if the current Bitcoin price falls compared to the purchase price, impairment losses must be recognized and recorded as expenses.
Elon Musk, Tesla's CEO, allowed electric vehicle purchases using Bitcoin in March but later announced the suspension of Bitcoin payments, citing that "the electricity used for Bitcoin mining is generated using fossil fuels, making Bitcoin not environmentally friendly."
After facing criticism for his inconsistent stance, Musk hinted at the possibility of resuming Bitcoin payments at a cryptocurrency-related event in July and stated that Tesla would not sell the Bitcoin it holds.
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