- As is well known, Tesla Inc. CEO Elon Musk is a fan of Dogecoin (DOGE). This fandom could have made the company and its shareholders profitable if some decisions had been made differently in 2021.
- In February 2021, Tesla purchased $1.5 billion worth of Bitcoin (BTC) according to an SEC filing. It is estimated that the company accumulated 43,860 BTC, each worth $34,200.
- Tesla’s ability to purchase $1.5 billion worth of Dogecoin alone would likely greatly increase the price of Dogecoin.
Elon Musk’s affection for DOGE, a leading “memecoin” in terms of market value and popularity, is well known in the crypto community. What would have happened if Tesla had bought Dogecoin instead of Bitcoin?
What If Tesla Preferred Dogecoin Instead of Bitcoin?
Tesla Inc. CEO Elon Musk is known to be a fan of Dogecoin (DOGE). This affection could have been profitable for the company and its shareholders if certain decisions had been made differently in 2021.
In February 2021, Tesla purchased $1.5 billion worth of Bitcoin (BTC) according to an SEC filing. It is estimated that the company accumulated 43,860 BTC, each worth $34,200. At current prices, this would be approximately $1.17 billion, and if we consider the Bitcoin price as $26,800, it would be considered a 21% loss.
As the bear market showed its claws, Musk’s company announced in the second quarter of 2022 that it had sold 75% of its Bitcoin holdings for $936 million. It is estimated that 33,135 BTC were sold at an average unit price of $28,248, resulting in a 17.4% loss compared to the initial purchase.
Currently, Tesla Inc. holds approximately 10,725 BTC, valued at around $287.43 million based on the current prices of the leading cryptocurrency.
However, considering the performance of Dogecoin against Bitcoin since the beginning of 2021, the investment results of the company could have been different if it had bought Dogecoin, Elon Musk’s favorite cryptocurrency and a leading “memecoin” in terms of market value and popularity.
What Would Tesla’s Crypto Assets and Results Have Been with Dogecoin?
Interestingly, considering Dogecoin’s performance against Bitcoin since the beginning of 2021, Tesla’s investment results could have been different. During this period, Dogecoin recorded a 66.57% increase against Bitcoin.
In this context, COINOTAG explored what would have happened to Tesla’s situation if it had traded with BTC instead of Elon Musk’s favorite cryptocurrency, Dogecoin, considering the price performance data.
When we consider that the strategic sale in the second quarter of 2022, which we think corresponds to 75% of the initial $1.5 billion purchase, hypothetically took place between approximately 100% and 200%, we can see that this situation could have resulted in Tesla’s gains increasing by approximately $2.8 billion. This means the company could have made a profit of approximately $2.8 billion with Dogecoin instead of Bitcoin.
Moreover, taking into account the 66.57% increase recorded in the price performance chart, if the remaining 25% BTC stock had been Dogecoin instead, Tesla would have owned approximately $620 million worth of DOGE, which means an additional $117.43 million in value compared to BTC.
However, this hypothetical scenario did not take into account some important nuances. In 2021, Dogecoin’s liquidity and accessibility were lower than BTC, and a large company like Tesla being able to purchase $1.5 billion worth of Dogecoin on its own would likely have significantly increased the price of Dogecoin. Therefore, there are some question marks about the applicability of this hypothetical scenario in the real world.
