It is known that Elon Musk, CEO of Tesla Inc. (NASDAQ: TSLA), is an enthusiast of Dogecoin (DOGE). This enthusiasm could have been turned into profit for his largest company and shareholders if some decisions were made differently in 2021.
In February 2021 Tesla bought $1.5 billion in Bitcoin (BTC), registered in a SEC filing. Estimates suggest that the company accrued around 43,860 BTC for an average price of $34,200 each, which would be worth approximately $1.17 billion at the time of publication, for a 21% of unrealized losses, considering Bitcoin price at $26,800.
With the bear market showing its claws, Musk’s company reported selling 75% of its Bitcoin holdings in 2022 Q2 for $936 million. Estimates believe 33,135 BTC were sold for an average price of $28,248 each, for realized losses of 17.4% from the original purchase.
However, considering Dogecoin’s performance against Bitcoin since early 2021, the company’s investment results would have been positively different if it had bought Elon Musk’s favorite cryptocurrency — the leading memecoin by market capitalization and popularity.
What would be Tesla’s crypto holdings and results with Dogecoin?
From the same point where Bitcoin lost 19.29% in price until September 21, 2023, Dogecoin registered an increase of 66.57%. In this context, Finbold has drawn a hypothetical scenario, simulating Tesla’s crypto tradings with DOGE instead of BTC.
Interestingly, considering the above price performance chart, the strategic sell-off in 2022 Q2 would have resulted in realized gains between 100% and 200%, hypothetically worth around $2.8 billion, from the correspondent amount of 75% that was sold from the first $1.5 billion purchase.
Considering the 66.57% price appreciation registered in the chart, the 25% of the left stash would be worth Tesla around $620 million in DOGE, instead of $287.43 million in BTC.
Notably, this simulation did not consider important nuances, such as the cryptocurrency liquidity and availability in 2021. It is highly likely that Tesla would not have been able to buy $1.5 billion in Dogecoin without causing a massive surge in price with their purchase alone.
Finbold has kept the original values in dollars for an easier comparison of price performance among two different digital assets in the crypto market, for readers’ entertainment only.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.