Tesla reports $600 million gain on Bitcoin holdings following new accounting rule update

Tesla’s Bitcoin holdings rose by $600 million in the fourth quarter after implementing a new accounting rule. The rule permits companies to value digital assets at market prices each quarter.

According to Arkham Intelligence data, the electric vehicle maker holds 11,509 BTC, estimated at $1.19 billion based on current market prices.

Tesla reports a $600 million Bitcoin gain under new accounting rules.

The automotive company did not disclose its Bitcoin holdings in its Q4 2024 report. Instead, it disclosed a $600 million mark-to-market gain on “digital assets.” Still, according to Bitcoin Treasuries, Tesla holds 9,720 BTC, making it the sixth-largest publicly traded company with Bitcoin on its balance sheet.

This gain stems from an accounting adjustment under new reporting rules, which increased Tesla’s reported digital asset value to $1.076 billion, up from the previously impaired value of $184 million recorded under older accounting methods.

In December 2023, the Financial Accounting Standards Board introduced a new rule update, requiring companies to report digital assets at their fair market value and not at the lowest price for which they have been recorded since they were purchased. Tesla adopted the rule early before the 2025 deadline, which is a requirement for all entities for fiscal years beginning after December 15, 2024.

Previously, Tesla could only report losses if Bitcoin’s price declined but was not allowed to record gains unless the asset was sold. 

Under the new standard, companies must recalculate the value of their crypto holdings from the market every quarter, as they do with other financial assets like stocks.

Tesla reports a 23% drop in operating profit despite rising sales and Bitcoin revaluation gains.

Tesla’s profit during the last three months of 2024 was $2.3 billion. This was a decline compared with $7.9 billion a year earlier, but 2023’s profit included a one-time tax benefit of $5.9 billion. Tesla’s operating profit, excluding that special gain, fell 23%  in the year’s final three months.

Conversely, sales rose 2% to $25.7 billion in the fourth quarter from $25.2 billion in the same period in 2023.

The company missed Wall Street’s estimate of $0.78 for adjusted earnings per share; It reported $0.73. However, investors are happy with the Bitcoin revaluation, and Tesla shares are up 4.3% in after-hours trading at $406.25.

According to Google Finance data, this followed a 2.25% decline in regular trading, bringing Tesla’s stock price to $389.10. With 11,509 BTC, Tesla continues to be one of the largest publicly traded Bitcoin holders.

Some investors seem to be hopeful that Musk’s close ties with President Trump will benefit Tesla, such as by helping to remove regulatory obstacles for self-driving vehicles. 

However, Trump and the Republicans in Congress have vowed to eliminate tax credits and other incentives for electric vehicles, including Tesla. Tesla’s CEO has stated that the removal of these incentives would impact rivals more than Tesla.

Other firms with crypto exposure, including MicroStrategy and Coinbase, may also see their reported asset values increase under the new accounting rule this year.

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