Tesla’s Bitcoin holdings surge by US$600 million after accounting rule change

Tesla’s Bitcoin holdings delivered a significant boost to its net income in the fourth quarter of 2024, thanks to a new accounting rule that allows companies to report digital assets at market value rather than their lowest historical price.

The company reported a jump from US$184 million to US$1.08 billion in the carrying value of its digital assets in its earnings release Wednesday. 

The increase was driven by a Financial Accounting Standards Board (FASB) rule change, which requires companies to mark digital assets to market each quarter starting in 2025. 

Previously, companies had to report Bitcoin holdings at their lowest recorded value, regardless of any subsequent price increases.

Tesla CFO Vaibhav Taneja confirmed that the accounting change resulted in a US$600 million increase in net income for the quarter and added US$0.68 per share in earnings.

“Net income in Q4 was impacted by a US$600 million mark-to-market benefit from Bitcoin due to the adoption of a new accounting standard,” Taneja said on the earnings call.

At the end of the third quarter last year, Tesla’s Bitcoin holdings were recorded at US$184 million, though their actual market value was closer to US$729 million. This means the true increase in Tesla’s Bitcoin value during Q4 was about US$347 million, reflecting Bitcoin’s strong rally in the last three months of 2024.

Much of Bitcoin’s recent price surge has been fueled by optimism surrounding President Donald Trump’s return to the White House, a move widely supported by the crypto industry. Tesla CEO Elon Musk, a top Trump adviser, was one of the president’s biggest financial backers. David Sacks, a longtime Musk ally, has been appointed as the White House’s AI and crypto czar.

According to Bitcoin Treasuries, Tesla is now the sixth-largest public holder of Bitcoin.

Despite missing Wall Street expectations for earnings and revenue, and reporting an 8% drop in auto sales, Tesla’s stock climbed in after-hours trading following the earnings report.

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