Tesla profits rose 34% on a bitcoin boost last quarter following an accounting rule change

Tesla's paper gains on bitcoin accounted for nearly $600 million of its net income this quarter.

Tesla's net income rose 34% last quarter, largely thanks to a huge boost from its bitcoin stash following a recent accounting rule change.

The electric vehicle maker's paper gains on bitcoin amounted to $589 million of its net income this quarter, according to its earnings statement.

Tesla's carrying value of its bitcoin holdings surged from under $200 million to just over $1 billion.

Bitcoin sprzedaży rekordowe zyski Tesli w ostatnim kwartale dzięki zmianie zasad księgowych

Elon Musk's car company booked $589 million in paper profits on the crypto as part of its net income, which rose 34% to $2.3 billion.

Tesla's finance chief Vaibhav Taneja confirmed on the company's earnings call that there was a "$600 million mark-to-market benefit from bitcoin, which is a result of adopting a new accounting standard for digital assets."

The Financial Accounting Standards Board recently changed its policy to allow companies to mark their digital assets to market each quarter. Before, they had to report their holdings at the lowest value those assets had reached under their ownership.

Tesla had been carrying its bitcoin hoard on its balance sheet at $184 million but marked it up to $1.076 billion last quarter. The fair market value of its digital assets was $729 million at the end of September, meaning they rose in value by nearly $350 million last quarter as bitcoin hit record highs.

Tesla first disclosed its $1.5 billion investment in bitcoin in January 2021, when the token was trading in the $30,000 to $40,000 range, compared to about $105,000 now.

The company said at the time that it had updated its investment policy to give itself more leeway to diversify and maximize returns on its excess cash. But the carmaker had sold about 75% of its bitcoin stash by the end of June 2022.

Crypto has been making a comeback as President Donald Trump continues to champion the nascent industry. He launched his own $Trump token ahead of his inauguration, and Trump Media & Technology Group announced this week that it will be moving into fintech and crypto.

Read the original article on Business Insider