fmcpay-telsas-bitcoin-holdings-boost-q4-earnings-by-600m-with-new-accounting-rule
News

Tesla’s Bitcoin holdings boost Q4 earnings by $600M with new accounting rule

Posted on by Audrey

Due partly to its Bitcoin holdings, Tesla’s financial performance improved in the fourth quarter of 2024.

A change in accounting regulations resulted in a $600 million gain for the corporation. By making this change, Tesla could value its Bitcoin at market rates.

Telsa makes $600M on Bitcoin

A new rule issued by the Financial Accounting Standards Board (FASB). Beginning in 2025, the rule requires businesses that own digital assets to mark those assets to market every quarter.

The new FASB rule allows corporations to adopt this adjustment early, which Tesla appears to have done. Before this regulation, businesses had to register their digital assets using their lowest valuation at the time of possession.

Tesla’s Bitcoin assets have significantly increased in value after being adjusted to reflect current market pricing. Furthermore, according to its Q4 earnings report, Tesla did not sell any Bitcoin.

Tesla’s Bitcoin holdings increased from $184 million in the prior quarters before the rule change to $1.076 billion in Q4 2024. The sharp rise is indicative of Bitcoin’s shifting market value, which has fluctuated over time.

The market value of Bitcoin rose by $600 million as a result, improving Tesla’s financial results. With the company’s Q4 GAAP income of $2.3 billion, the Bitcoin gain was a major contributor to the outcomes.

“It’s important to point out that the net income in Q4 was impacted by a $600 million mark-to-market benefit from Bitcoin due to the adoption of a new accounting standard for digital assets,” CFO Vaibhav Taneja reportedly noted on the earnings call.

According to Bitcoin Treasuries, Tesla holds 9,720 BTC, making it the sixth-largest publicly traded company holding Bitcoin.

fmcpay-top-companies-holding-bitcoin
Top Companies Holding Bitcoin. Source: Bitcoin Treasuries

In 2021, Tesla bought 43,200 Bitcoin to get into the market. Over the years after this first acquisition, Tesla traded off a portion of its Bitcoin holdings.

Concerns regarding the impact of the new accounting regulations on Microstrategy’s profits have also been raised by the shift in Tesla’s Bitcoin valuation.

Gary Gensler’s MIT return triggers hiring freeze for graduates at Gemini exchange

The Gemini cryptocurrency exchange’s co-founder, Tyler Winklevoss, declared that the business will no longer be accepting interns and MIT grads. As long as former Securities and Exchange Commission (SEC) Chair Gary Gensler is still employed by the company, the hiring freeze will stay in place.

The audacious action is a reflection of the continuous conflict between regulatory agencies and the cryptocurrency industry.

Tyler Winklevoss sends strong message to MIT

Gensler rejoined the faculty at MIT Sloan School of Management as reported. After years of directing the SEC’s assault on the cryptocurrency sector, Gensler is making a comeback. In light of this, Tyler Winklevoss made a powerful statement at MIT. He expressed Gemini’s determination to avoid any kind of association with Gensler.

Cameron Winklevoss, the second twin, has refrained from commenting on the situation. But until Gensler is fired, he reaffirmed demands to boycott MIT grads.

Among the business leaders leading the charge for pro-crypto legislation are the Winklevoss twins. They have contributed significantly to pro-crypto candidates and causes and have been quite engaged in political circles. The twins have also contributed to President Donald Trump’s campaign and engaged in other noteworthy political fundraising activities.

When combined, it shows why they don’t like Gensler because of the unfair regulations that were implemented during his time. Discussions concerning the controversy’s effects on MIT students and alumni have also been sparked. MIT alumni responded to the comments made by Caitlin Long, the founder and CEO of Custodia Bank.

In fact, MIT alumni are being enlisted in the cryptocurrency movement by Matt Huang, co-founder of the crypto-focused investment firm Paradigm. This is probably a reaction to the criticism that followed Gensler’s return. Huang graduated from the same university with a B.S. in mathematics.

Coinbase CLO The appeal has already been answered by Paul Grewal, who graduated from MIT with an SB. This demonstrates the range of Winklesvoss’s positions, causing responses both inside and outside of the bitcoin community. Winklevoss was backed by certain industry participants who criticized Gensler’s regulatory strategy at the SEC.

On the other hand, some have defended Gensler’s scholarly work. They mentioned how well he performed in the several classes he took prior to joining the SEC.

Despite Gemini’s strong opposition to Gensler’s return to MIT, the exchange still has to deal with regulatory issues. The business recently agreed to pay a $5 million punishment in a settlement with the Commodity Futures Trading Commission (CFTC).

Gemini did not, however, acknowledge or refute claims that it had misled the regulator. Furthermore, Gemini declared its withdrawal from the Canadian market, primarily due to regulatory pressures.

The results may have long-term effects as the relationship between academia, regulation, and the cryptocurrency sector becomes a hot topic of discussion.

SEC acknowledges Canary Capital’s Litecoin ETF application

The SEC formally recognized Canary Capital’s 19b-4 filing for a Litecoin ETF, sending a significant indication of approval. After Ethereum, this is the first cryptocurrency ETF to be given this approval, and it gives the Commission a deadline to accept or reject it.

The price of LTC has already increased once more as a result of these ETF rumors. Although the SEC’s action is a very good sign, the majority of the other cryptocurrency ETF applications have not yet been addressed by the Commission.

Canary Capital: The first Litecoin ETF?

Although it has its supporters, Litecoin ETFs have occasionally been viewed as “dark horse candidates” for cryptocurrency ETFs. According to ETF analysts James Seyffart and Eric Balchunas, it has a better chance of being approved than Solana or XRP, and their prediction is coming true.

The SEC accepted Canary Capital’s 19b-4 application for an LTC ETF today.

This specific milestone in the SEC’s ETF approval process is particularly significant. Balchunas clarified that this 19b-4 acknowledgment locks in a fixed timeframe in reference to prior unsuccessful Solana ETF attempts.

Within the next 240 days, this Litecoin ETF will either be approved or rejected, regardless of the process that takes place in between.

The price of Litecoin (LTC) has, of course, been impacted by these ETF rumors. The value of LTC increased by 12% following the Nasdaq’s initial filing of this form 19b-4.

The asset also benefited from Grayscale, another ETF producer, filing its own application last week. This trend continues today with fresh forward impetus thanks to the SEC’s 19b-4 acknowledgment.

fmcpay-litecoin-price-performance
Litecoin (LTC) Price Performance. Source: FMCPAY

This small move, however, does not ensure that Canary Capital’s Litecoin ETF will be successful. Numerous cryptocurrency ETF applications, many with slim prospects of success, have flooded the SEC after Gary Gensler’s resignation.

The SEC’s actions in this case will be a crucial piece of information. The SEC may not accept all cryptocurrency ETFs, even if it begins to approve some.

amid-the-increasingly-competitive-cryptocurrency-market-fmcpay-is-charting-a-pioneering-path-by-developing-its-proprietary-blockchain-with-ambitions-for-2025

Buy your favorite crypto now