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Breaking News: Tether Targets $500 Billion Valuation In New Equity Offering Amid US Expansion Plans

Tesla Ruins Bitcoin Rally? Musk’s Company Sold 75% Of Its BTC

Reynaldo Marquez
Reynaldo Marquez
1 year ago
2 mins read
Bitcoin BTC BTCUSD Tesla

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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.

Bitcoin BTC BTCUSDT
BTC’s price with important profits on the 4-hour chart. Source: BTCUSD Tradingview

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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Reynaldo Marquez
Reynaldo Marquez

Reynaldo Marquez

A literature major, Reynaldo Márquez has been deeply immersed in the crypto industry since 2017. His journey began with translating articles for various crypto news outlets, a role he took on with zeal. In 2018, amidst a challenging market, he embraced his first writing assignment, demonstrating his unwavering commitment to the nascent industry and the promise of change it bears for many people worldwide.
In March 2021, he joined the prestigious crypto news outlet NewsBTC and Bitcoinist, where he not only reported on the latest crypto news but also had the privilege of interviewing some of the industry's most influential figures. A year later, his dedication and hard work were recognized, and he was promoted to Managing Editor, a position he currently holds with pride.
He believes in honesty, good communication, hard work, and the power of cryptocurrency and its potential to transform people's lives, especially those alienated by the legacy financial system. Born in 1992 in Venezuela, Reynaldo is familiar with how governments and central banks can negatively affect people, their everyday lives, and their futures by creating inflation and erasing their hopes for a better future. Thus, like many Venezuelans, he embraced this new technology to help him and his family navigate difficult times.
In another life, Reynaldo would have pursued a career as an investigator, most likely tracking down the origins of the Cyberpunk movement with the publication of William Gibson’s ‘Neuromancer.’ The intersection between fiction and reality, with the materialization of Bitcoin in 2009, would have allowed him to dive deep into the crypto sphere as something more than a financial phenomenon but also a cultural shift in society that was brewing since the XX century, and maybe even sooner, in the XIX century with the publication of Henry David Thoreau’s ‘Civil Disobedience.’
But that’s for another life. In this one, Reynaldo has been trading to improve his trading skills. Since 2023, he has been trying to learn Python to create successful strategies and find ways to execute them. It is a difficult task, which continues to keep him busy today and will most likely continue to keep him busy in the near and long term.
In his free time, he enjoys lifting heavy objects, reading, watching movies, and listening to his favorite music. Some of his favorite authors are Walt Whitman, William Faulkner, Allen Ginsberg, James Baldwin, Raymond Carver, Ray Bradbury, George Orwell, Mario Vargas Llosa, Reinaldo Arenas, Rafael Cadenas, and many others. Lately, he has been primarily interested in reading about dystopic societies, a topic that deeply resonates with the crypto industry.
Since 2023, he has lived in Spain with his wife. He loves the weather, the food, and the people and their culture. They both expect to travel much more within the country they now call home and beyond its border. He hopes to retire with his wife, maybe in a quiet place near a beach, but most likely in a city close to a library and a university with his kids and, hopefully, grandkids.

Disclaimer: The information found on NewsBTC is for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

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