Tesla shocked the financial world in February 2021 when it bought $1.5 billion worth of Bitcoin at around $30,000 per coin. The electric car maker’s investment sent Bitcoin’s price soaring and enhanced market confidence. But the company’s relationship with the cryptocurrency didn’t last long.
Tesla’s $1.5 billion Bitcoin investment sent shockwaves through financial markets, but the romance quickly soured.
Just one month later, Tesla sold 4,320 Bitcoin worth about $200 million. The reason? CEO Elon Musk worried about Bitcoin mining’s environmental impact. In May 2021, Tesla stopped accepting Bitcoin payments for its cars, causing the cryptocurrency’s price to drop 12%. The company said Bitcoin mining used too much energy from fossil fuels, which conflicted with Tesla’s eco-friendly image.
Tesla continued selling Bitcoin in 2022, reducing its crypto holdings even more. By Q2 2022, the company had sold about 75% of its original Bitcoin investments. Despite these sell-offs, the company reported a $275 million profit from its Bitcoin trades in 2023. By early 2025, Tesla’s remaining Bitcoin was worth $951 million after crypto prices fell.
The company’s timing turned out to be unfortunate. Bitcoin’s price rebounded to $93,000 by April 2025. If Tesla had kept its original $1.5 billion investment, it would now be worth about $3.5 billion. That’s a missed opportunity of roughly $2 billion.
New accounting rules introduced in 2023 now require companies to report cryptocurrency at market value. This means Bitcoin’s price swings directly affect Tesla’s quarterly earnings, even when the company doesn’t buy or sell any coins. In late 2024, Tesla recorded a $600 million gain just from Bitcoin’s price increase.
Tesla’s moves greatly influenced Bitcoin’s price in 2021. When the company bought, prices rose. When it sold or criticized Bitcoin’s energy use, prices fell. Musk’s single tweet containing just “One word: Doge” caused massive market reactions across multiple cryptocurrencies. Traders watched Tesla’s every move closely.
Meanwhile, competitors took different approaches. MicroStrategy kept buying and holding Bitcoin, benefiting from the recent price surge. Even SpaceX, another Musk company, added Bitcoin to its balance sheet.
Tesla said it might accept Bitcoin payments again if mining becomes more sustainable. The company wants transparency about miners’ energy sources before reconsidering. For now, Tesla’s early exit from Bitcoin stands as a costly decision that cost billions in potential profits.