Tesla Reports $600 Million Bitcoin Gain in Fourth Quarter

Despite this, Tesla’s overall earnings fell short of expectations, which led to mixed market reactions. Meanwhile, Texas is pushing forward with its plans to establish a Bitcoin reserve, joining other states considering similar initiatives. On the global front, the Czech National Bank is also exploring a Bitcoin investment as part of its diversification strategy. As institutional interest in Bitcoin grows, analysts are still bullish on its long-term trajectory, despite potential short-term corrections.

Tesla’s Bitcoin Holdings Surge

Tesla reported a $600 million gain from its Bitcoin holdings in the fourth quarter of 2024, thanks to new accounting rules that allow companies to record the market value of their crypto assets. The company’s Q4 results were released on Jan. 29, and revealed that its Bitcoin holdings were valued at just over $1 billion. This is a big increase from the $184 million that was recorded in previous quarters, and means a net gain of $589 million for Tesla over the quarter. Its Bitcoin treasury now holds 9,720 BTC, according to Bitcoin Treasuries.

A key factor behind this shift is a rule change from the Financial Accounting Standards Board (FASB) that took effect in mid-December. Previously, corporate crypto holdings were only reported at their lowest valuation in an accounting period. This means that any increase in value remained unrealized until the asset was sold. The new rule now allows companies to reflect the estimated market value of their digital assets on their balance sheets, which matches financial statements more closely with actual market conditions.

Tesla Q4 results highlights (Source: Tesla)

Despite the boost from Bitcoin, Tesla’s overall Q4 earnings fell short of Wall Street expectations. The company reported a GAAP income of $2.3 billion, with total revenues reaching $25.71 billion—a 2% year-over-year increase. However, this was still below analysts’ estimates of $27.22 billion. Tesla also missed profit projections after reporting an earnings per share of $0.73, slightly below the expected $0.76. Meanwhile, its operating expenses for the quarter rose to $2.59 billion, a more than 9% increase from the previous quarter.

Tesla’s stock performance reflected investor’s concerns by closing down 2.26% on Jan. 29. However, after-hours trading saw a 4.15% rally that brought the share price to $405.25. Over the past 12 months, Tesla’s stock gained 103.79%, and even reached an all-time high of $479 on Dec. 17.

Tesla stock price (Source: Google Finance)

The company first entered the crypto space in February of 2021, after buying 42,902 Bitcoin before selling 75% of its holdings in July 2022. That sale of more than 30,000 BTC brought in $936 million. 

Other companies like Semler Scientific, Genius Group, and Rumble also adopted Bitcoin as a treasury asset, following in the footsteps of MicroStrategy. Michael Saylor’s firm holds the largest Bitcoin treasury among public companies, with 471,000 BTC worth approximately $48 billion, according to Saylor Tracker.

Texas Moves to Create Bitcoin Reserve

Other companies holding Bitcoin stockpiles might also soon have a reason to laugh all the way to the bank as several states and countries get ready to form their own Bitcoin reserves. Texas Lieutenant Governor Dan Patrick recently announced the state’s 2025 legislative priorities, which include a proposal to establish a Texas Bitcoin Reserve. 

This move positions Texas among at least five other US states, including Arizona, Wyoming, and Utah, where legislatures are working on creating cryptocurrency reserves. In both states, strategic reserve bills have already advanced out of committee.

Two public officials in Texas took legislative steps toward making a Bitcoin reserve a reality. The most recent effort came from state Senator Charles Schwertner, who introduced legislation on Jan. 16, and stated that a Texas Bitcoin reserve will place the state at the forefront of the digital economy while also securing financial freedom. His push happened after an earlier legislative move from Texas Republican state Representative Giovanni Capriglione, who introduced a bill in December of 2024 to create a strategic Bitcoin reserve. Capriglione’s legislation will also allow state fees, taxes, and contributions to be paid in Bitcoin, which could then be used to help establish the reserve.

Supporters of these reserves argue that they modernize financial systems while still providing an inflation hedge and a symbol of economic progress. The concept gained a lot of traction beyond Texas as well, with reports that countries like Chile, China, and the US itself are also considering similar initiatives. 

US President Donald Trump included the creation of a national strategic Bitcoin reserve as part of his campaign promises. Additionally, Wyoming Senator Cynthia Lummis introduced the BITCOIN Act, which is a legislative proposal that is aimed at establishing a Bitcoin reserve on a national level.

As the second-largest state economy in the United States, Texas wields major financial influence. If it were an independent nation, its economy would rank as the eighth largest in the world. The Texas comptroller reports that the state generates more than $250 billion annually in revenue from taxes, fees, and assessments. Additionally, Texas has become a major hub for Bitcoin mining by attracting miners with its more affordable energy, abundant renewable power sources, and favorable regulatory environment. 

Czech National Bank Considers Bitcoin Investment

The Czech National Bank (CNB) may soon become the first European central bank to invest in Bitcoin as part of its foreign exchange reserve diversification strategy. Governor Aleš Michl is set to present his Bitcoin acquisition plan to the bank’s board on Jan. 30, according to an interview with the Financial Times. 

If approved, the investment could exceed $7.3 billion in Bitcoin purchases, which is a very large allocation considering the CNB’s total reserves surpass $146 billion. André Dragosch, head of research at Bitwise, pointed out that it will be equivalent to approximately 5.3 months of newly mined Bitcoin supply.

This development came after Michl’s earlier comments about considering Bitcoin as a reserve asset. Three weeks ago, he shared his interest in buying “a few Bitcoin” for diversification, though as recently as Jan. 7, the bank stated that it was not exploring such an investment. Janis Aliapulios, an adviser to the board, clarified that CNB’s primary diversification focus was increasing its gold holdings to 5% of total assets by 2028. Michl acknowledged that Bitcoin is an asset worth considering for a large portfolio but pointed out that the bank’s board will require very thoughtful analysis before making a final decision.

The growing interest from central banks coincides with shifting global attitudes toward Bitcoin, especially in the United States. US President Donald Trump’s administration created a lot of optimism among crypto investors due to expectations of a much more favorable regulatory environment. Michl commented that while Trump’s policies could help create a bullish phase for Bitcoin, the trend of increased adoption will likely continue regardless, as more people recognize it as an alternative investment.

Despite Bitcoin’s strong long-term outlook, some analysts warn of potential short-term corrections because of macroeconomic factors. The US debt ceiling, which recently hit $36 trillion, may cause serious liquidity challenges that could possibly lead to a temporary price correction to $70,000 before Bitcoin resumes its upward trajectory. 

Raoul Pal, founder of Global Macro Investor, stated that an “interim peak in liquidity” could trigger deeper pullbacks. However, long-term projections are still bullish, with analysts predicting Bitcoin could reach between $160,000 and $180,000 in 2025.