What Tesla's $936M Sell-Off Means For Bitcoin Price Rate?
- 20 Jul, 2022
Tesla’s move to sell 75 per cent of its Bitcoin (BTC) assets has been mostly ignored by crypto industry insiders, who say it’s a common approach for corporations to enhance cash flow amid economic downturns.
After selling 75% of its Bitcoins holdings in the second quarter, the electric car maker now has $936 billion in fiat.
CEO Elon Musk said the transaction “should not be viewed as a judgement on Bitcoin” because of the continuing COVID-19 lockdowns in China, citing liquidity concerns.
Since we weren’t sure when the Covid lockout in China would end, we decided to sell some of our Bitcoin holdings.” Because of this, we needed to boost our financial reserves:”
This is not surprising since if Tesla had sold 100% of its Bitcoin at the current price, they would have done so long after the price had stabilised.”
According to Finder’s share trading specialist Kylie Purcell, a comparison website, “Shoring up funds in cash currencies,” isn’t a new strategy for electric vehicle manufacturers.
“It’s not uncommon for investors and firms to transfer cash away from more risky assets into fiat money as the globe heads into an economic downturn and perhaps a recession,” she said.
Even if Bitcoin’s price dropped after the news, there are already indications of a comeback, according to the expert.
As of this writing, Bitcoin’s price stands at $23,299, which is near to its yet another high, indicating that the crypto community was unconcerned by Tesla’s statement on Wednesday and that the price has since rebounded.
The transaction was met with a more subdued response than when Telsa announced in February of last year that it had acquired $1.5 billion in Bitcoin to add to its income statement and was preparing to accept Payments in bitcoin for some items.
After hearing the news, Bitcoin’s price jumped about $3,000, putting it at a new only those high of $43,000.
The market seems to have accepted Musk’s statement that the transaction was not a judgement on Bitcoin but rather a financial move at face value. Even though Bitcoin’s price has steadied in the previous 24 hours, we wouldn’t be shocked if additional large investors followed suit, particularly given the current price of Bitcoin.”
