Tesla Ruins Bitcoin Rally? Musk’s Company Sold 75% Of Its BTC
20 Julio 2022 - 4:34PM
NEWSBTC
Bitcoin has lost some of its gains as news about Tesla’s earnings
report is published. The Elon Musk-led company revealed that it
sold 75% of its BTC holding at a 9% loss over Q2, 2022. Related
Reading | Short Positions Over $165 Million Get Liquidated
Following The Bitcoin And Ethereum Uptrend According to the
reports, the company has converted its Bitcoin holdings into fiat
currency. In consequence, Bitcoin was rejected close to the $24,000
price point and now trades at $23,100 with a 2% loss over the past
hour. The cryptocurrency still records a 20% gain over the past
week and market sentiment still leans optimistic about the
potential for future profits. Jeff Dorman CIO for investment firm
Arca commented the following on recent developments and their
potential to impact Bitcoin: If you’ve ever wondered whether or not
trading bots control digital asset trading…keep in mind the entire
digital asset market just fell on news that one company (Tesla)
sold one asset (BTC) 1-3 months ago. Expect full retrace of this
move quickly. Tesla stock recorded a 4% profit immediately after it
published its earnings report and it approaches its highest level
since June. Ludwig Wittgenstein claims the car manufacturer’s
decision to liquidate a large portion of its BTC holding could have
long-lasting consequences for the crypto market. Tesla +4% on
earnings ¯_(ツ)_/¯ pic.twitter.com/coOFjpsOqy — TradingView
(@tradingview) July 20, 2022 The Elon Musk-led company purchased
Bitcoin in 2021. At that time, BTC’s price was losing steam as it
traded around its current levels, but when Tesla announced its
decision, the cryptocurrency was able to rally into uncharted
territory. The company purchased BTC as a corporate strategy to
hedge against inflation and as a tool to potentially increased its
cash flow. Thus, why it is important to understand the reasons
behind this BTC sale. According to Wittgenstein, there are three
potential scenarios, the company needed to raise cash, there are
climate concerns about BTC alleged energy consumption, or a total
loss of faith in the cryptocurrency. The first scenario is the most
bullish, and the last the most bearish. Why Did Tesla Sold Its
Bitcoin? Founder at NorthmanTrader Sven Henrich believes Tesla
followed a corporate strategy when the price of Bitcoin dropped
below $20,000. The company forced itself to liquidate a portion of
its assets to maintain its cash flow. Henrich said: In trading
terms: $TSLA got itself margin called and liquidated a large chunk
of its digital asset portfolio to make itself free cash flow
positive & improve its balance sheet. Related Reading
| XRP Wins Again: Bullish Rally Sees It Climb to Sixth Spot by
Market Cap So far, Wittgenstein’s first scenario seems to be in
play. If the crypto market can stay in its current course, despite
Tesla’s news, BTC’s price could reclaim the important area above
$27,000.
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