What is Tesla up to this time? And why would it sell a huge number of its Bitcoin holdings? Was this just a move to add about $936 million to the company’s cash reserve, or there’s more?
WHO IS TESLA
Since climate change became a thing, companies like Tesla have been at the forefront of curbing the effect via the production and sales of their electric cars. Tesla also specializes in solar panels and the production of Lithium-ion batteries.
The multi-billion dollar firm is owned by Elon musk-The highest shareholder of the company, holding about 17% of its shares and a big investor in the Cryptocurrency market.
Tesla announced during its earning calls on Wednesday that it had sold 75% of its owned Bitcoin holdings and converted them to fiat currency.
The company held Cryptocurrency worth approximately $218 million at the end of the second quarter of its Q2 report.
Tesla had earlier purchased Bitcoin worth about $1.5 billion in February 2021. This move pushed the price of BTC higher. This purchase was followed by an almost immediate sell-off to test Bitcoin liquidity. Tesla is a strong preacher for the salvaging of Climate change, and hence it stopped accepting Bitcoin as a means of payment in May 2021. This was due to the environmental concerns posed by Bitcoin mining.
That notwithstanding, the E-Car firm still held in its reserve a total of $1.99 billion worth of Bitcoin as of December 2021.
The CEO of Tesla-Elon Musk, over the years, has been a key influencer among other high-profile influencers and believers of cryptocurrency, with his tweets and social media updates that play a massive role in driving huge trading activities.
And it is almost certain that this massive sell-off could pose a considerable drop in the price of Bitcoin. Bitcoin in recent times since crypto winter has struggled to stay afloat. With price fluctuations that seem to scare investors and holders.
Tesla seems to be one of that shying away as the bear still ravages. It is backing away as a result of the value of Bitcoin that has dropped and isn’t showing signs of coming back up soon, rather has fallen by over 50% in 2022.
The once dominant Bitcoin is currently trading at a value just above the $23,000 mark after the announcement by Tesla. Bitcoin has seen worse, and a 3% drop doesn’t seem to be new.