Tesla saw a boost in its financial performance in the fourth quarter of 2024, thanks in part to its Bitcoin holdings.

The company reported a $600 million gain due to a change in accounting rules. The move allowed Tesla to value its Bitcoin at market prices. 

Tesla Makes $600 Million on Bitcoin

This shift in accounting standards stems from a new rule by the Financial Accounting Standards Board (FASB). The rule mandates that starting in 2025, companies holding digital assets must mark those assets to market each quarter.

The new FASB rule gives companies the option to implement this change earlier, which Tesla appears to have done. Before this rule, companies were required to report their digital assets based on the lowest valuation of those assets during their time of ownership.

Now, after adjusting values to current market prices, Tesla saw a marked increase in the valuation of its Bitcoin holdings. Moreover, as per its earnings release, Tesla did not sell any Bitcoin in Q4.

In Q4 2024, Tesla’s Bitcoin holdings were valued at $1.076 billion, up from just $184 million in previous quarters after the rule change. The dramatic increase reflects the changing market value of Bitcoin, which has seen fluctuations over time. 

This increase in Bitcoin’s market value contributed to a $600 million gain, boosting Tesla’s financial performance. The company’s total GAAP income for Q4 reached $2.3 billion, meaning that Bitcoin gain played a key role in the results.

“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.

Tesla entered the Bitcoin market in 2021 with the purchase of 43,200 BTC. Following this initial purchase, Tesla sold part of its Bitcoin holdings over the years.

The change in Tesla’s Bitcoin valuation has also raised questions about the effect the new accounting rules will have on Microstrategy earnings. 

“What on earth is going to happen when MicroStrategy announce their earnings next week. They have 471,107 Bitcoin and most likely will also take advantage of the new FASB accounting rule,” a X user posted.

Illinois and Indiana have introduced bills to establish a Strategic Bitcoin Reserve. They join a growing list of US states exploring Bitcoin as a financial asset. 

While Illinois aims to create a Bitcoin reserve fund, Indiana’s bill differs slightly. It explores how blockchain technology can enhance state agency operations. In addition, the bill explores investments in Bitcoin exchange-traded funds (ETFs).

Illinois’ Push for a Bitcoin Reserve

Illinois State Representative John M. Cabello has introduced House Bill 1844 (HB1844), also known as the Strategic Bitcoin Reserve Act. The bill highlights Bitcoin’s potential as a decentralized, finite digital asset that could serve as a hedge against inflation and economic volatility.

“A strategic bitcoin reserve aligns with Illinois’ commitment to fostering innovation in digital assets and providing Illinoisans with enhanced financial security,” the bill read.

The proposed bill seeks to establish the Strategic Bitcoin Reserve Fund, overseen by the State Treasurer. It offers provisions for accepting Bitcoin donations from residents and government entities.

Furthermore, the bill specifies a minimum holding period of five years. Therefore, any Bitcoin added to the fund would be held for the specified time before the state could sell, transfer, or convert it into another cryptocurrency. 

The bill also lays out guidelines for securing and managing the fund. It requires transparency through regular reports and gives the State Treasurer the power to set necessary rules.

Indiana’s Bitcoin Strategy

Meanwhile, Indiana is taking a slightly different approach. House Bill 1322, authored by state Representative Jake Teshka and co-authored by Representatives Shane Lindauer and Cory Criswell, focuses on both blockchain adoption and Bitcoin investment strategies. 

The bill directs the Department of Administration to explore how blockchain technology could improve government efficiency, data security, and consumer experience.

“The department of administration (department) shall issue a request for information for purposes of exploring how the use of blockchain technology could be used by a state agency to: (1) achieve greater cost efficiency and cost effectiveness; and (2) improve consumer convenience, experience, data security, and data privacy,” HB1322 states.

It also paves the way for state-managed investment in Bitcoin. The bill allows funds from the public employees’ retirement fund, state teachers’ retirement fund, and public officers’ funds to be invested in approved Bitcoin exchange-traded funds (ETFs). 

These include spot Bitcoin ETFs, which hold Bitcoin directly. Additionally, it includes Bitcoin futures ETFs. These track Bitcoin’s price movements through derivatives.

This move comes as Utah and Arizona advance legislation to invest public funds in digital assets. Furthermore, Texas Lieutenant Governor Dan Patrick has made the Bitcoin Reserve a top priority for 2025.

Similar proposals from South Dakota and Kentucky may follow as state representatives prepare to introduce bills creating a Strategic Bitcoin Reserve.

Dan Patrick, Lieutenant Governor for the State of Texas, listed Bitcoin Reserve as a top priority for 2025. Other industry-adjacent priorities include “Texas D.O.G.E.” and electrical grid upgrades.

However, Patrick did not give any clear indications of pro-crypto sentiments before today and actually criticized the mining industry in Texas last year. It is unclear how deep his newfound commitment to the industry will go.

A Texas Bitcoin Reserve

The movement to create a US national Bitcoin Reserve has been growing in strength for months now. Around 15 states are crafting legislation for state-level Bitcoin reserves, and Texas has been an early and persistent member of this coalition.

Today, Lt. Gov. Dan Patrick listed the establishment of a Texas Reserve as a “top priority” for 2025.

Although the push for a national-level reserve is apparently growing, it has received a few setbacks. President Trump issued an executive order to create a “digital stockpile,” which is neither Bitcoin-exclusive nor integrated with the Federal Reserve.

Some have feared that this half-measure may sap energy for a national reserve, but Texas is still trying to stockpile Bitcoin.

Initially, Patrick announced the names of 25 bills with the “top priority” designation and will follow up with 15 more. However, only a few of these directly or indirectly benefit crypto. The Texas Bitcoin Reserve proposal is an obvious help, as is the “Texas D.O.G.E.” proposal.

However, the governor preemptively addressed these concerns, saying he limited his initial set of goals:

“Senators like having a low bill number since it shows their bill is a priority of the Lt. Governor and has a high probability of passage. Just because a bill is not included in the top 40 does not mean it is not a priority for me or the Senate. There will be hundreds of bills that pass the Senate, all of which are important to Texas,” Governor Patrick claimed.

Additionally, several other priority bills would clearly help Texas’ Bitcoin industry through one avenue: crypto mining. The state has become a hub for mining, with several leading companies relocating to Texas in the last year.

Some of Patrick’s other priorities, like investing in the electrical grid or water supply, would likely benefit this industry.

“A US state moving to hold BTC on the books? That’s next-level adoption. If this passes, Texas wouldn’t just be mining-friendly – it’d be holding hard money on a state balance sheet,” wrote Mario Nawfal.

Ultimately, though, it may be too early to get particularly excited. Patrick has occupied this position for a decade, and he hasn’t made any substantial pro-crypto statements or policies before this.

In fact, he publicly criticized the mining sector last year. In short, the governor may have placed a top priority on a Texas Bitcoin Reserve, but the bill still needs to pass.