Cryptocurrencies boost Donald Trump's wealth and improve Tesla's financial results
Of the $2.32 billion (€2.22 billion) that Tesla, the electric car manufacturer, earned in the fourth quarter, more than a third didn’t come from the automotive industry, battery sales, solar equipment, or software. 34% of the profits came from cryptocurrencies, specifically Bitcoin. These were recorded as accounting gains. The company, led by Elon Musk, who is also its primary leader, saw an increase in the value of its cryptocurrency reserves by $589 million (€568 million) due to the rise in Bitcoin’s value.
This detail went unnoticed by analysts when the results were announced, partly because their focus, as is common with Musk’s company, was on the announcement of large future projects, which often don’t meet the projected deadlines, and sometimes never even materialize, like the planned launch of a robotaxi network in Austin, similar to the ones operated by Waymo (a subsidiary of Alphabet) in Phoenix, Los Angeles, and San Francisco. There was just a brief mention from CFO Vaibhav Taneja stating that there was a "gain of $600 million in market value of Bitcoin due to the adoption of new accounting rules for digital assets."
So, it was Bitcoin that saved Tesla. The company’s results had disappointed the market, which had expected earnings of 76 cents per share, three less than what the company actually reported. The world’s second-largest electric vehicle manufacturer, after the Chinese company BYD, lost market share in the U.S., falling for the first time in its history below 50%, to 44%. In the last quarter of the previous year, Tesla’s most promising regions were China (which raises doubts about Donald Trump’s desire to impose tariffs on the country, given that Musk is arguably one of the most influential people in his advisory circle) and, of course, Bitcoin.
The introduction of Bitcoin into Tesla’s financial results is the result of a change in U.S. accounting regulations implemented in August, under President Joe Biden, which allowed companies’ Bitcoin reserves’ capital gains to be recognized as profits for accounting purposes. Musk, like many former PayPal executives and investors, known as the "PayPal mafia," is a firm believer in the future of cryptocurrencies. In November, virtual currencies surged following Trump’s victory.
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