Bitcoin achieves record highs, significant profits for Elon Musk's Tesla and SpaceX

Blockchain analytics firm Arkham Intelligence claims to have identified the cryptocurrency wallets of Elon Musk's companies. By cross-referencing financial reports with on-chain activity, Arkham located the substantial wallets. The combined Bitcoin holdings of Tesla Inc. and SpaceX reportedly amount to approximately 19,800 Bitcoins. This stash is distributed across multiple wallets, with Tesla holding about 11,500 BTC across 68 addresses, and SpaceX holding around 8,300 tokens across 28 wallets. 

After Bitcoin surged to new record highs, surpassing the $72,000 threshold, the combined value of the tokens in Tesla and SpaceX wallets now exceeds $1.4 billion.

This substantial cryptocurrency holding has proven to be a lucrative investment for the companies. SpaceX has realized $276 million in profits from this venture, while Tesla has gained nearly $500 million. Although these amounts may seem modest compared to the companies' operational profits, they stand out when compared to other investments.

Tesla initiated its Bitcoin investment in February 2021, making an unprecedented move by injecting $1.5 billion into the cryptocurrency. This played a role in the subsequent Bitcoin rally that resulted in new all-time highs within a month.

Despite the substantial returns, Tesla made some less-than-ideal decisions, such as selling almost 30,000 Bitcoins in June 2022. This move, driven by the company's need for cash and Elon Musk's intention to showcase Bitcoin's capability to handle large transactions, occurred when Bitcoin was trading at around $25,000, significantly below its current market value. 

In contrast, approximately 10% of Tesla's overall Bitcoin holdings were sold after the cryptocurrency reached new record highs, surpassing $60,000 in March 2021. The sale of 4,320 Bitcoins yielded more than $250 million in cash.

Elon Musk and Tesla initially embraced Bitcoin in early 2021, coinciding with their initial $1.5 billion investment. However, in May 2021, Musk halted the acceptance of Bitcoin for Tesla vehicle purchases, citing environmental concerns related to the substantial energy consumption associated with Bitcoin mining and transactions, particularly from coal, known for its high emissions.

Musk, despite being a strong supporter of cryptocurrency, expressed reservations about using tokens that consume excessive energy and pose potential harm to the environment. Bitcoin operates on a proof-of-work (PoW) mechanism, where participants utilize computational power to compete for transaction processing rights, resulting in considerable energy usage.

While Musk may not engage in Bitcoin transactions due to environmental considerations, the cryptocurrency has undeniably proven lucrative as an investment for him and Tesla.