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

Bitcoin lost some of its gains as news broke about Tesla’s earnings report. The Elon Musk-led company revealed that it sold 75% of its BTC holdings at a loss of 9% during the second quarter of 2022.

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according to ReportsThe company converted its bitcoin holdings into fiat currency. As a result, Bitcoin was rejected near the $24,000 price point and is now trading at $23,100 with a 2% loss over the past hour.

BTC price with significant profits on the 4-hour chart. source: BTCUSD TradingView

The cryptocurrency is still posting a 20% gain over the past week and market sentiment remains optimistic about the potential for future earnings. Jeff Dorman CIO for investment firm Arca hung Here are the recent developments and their potential impact on Bitcoin:

If you have ever wondered whether or not trading bots control the trading of digital assets… keep in mind that the entire digital asset market just caught the news that one company (Tesla) sold one asset (BTC) 1-year ago. 3 months. Expect a full correction of this movement quickly.

Tesla stock posted a 4% gain immediately after it published its earnings report and approached its highest level since June. Ludwig Wittgenstein claims that the automaker’s decision to liquidate a significant portion of its BTC holdings may have long-term consequences for the cryptocurrency market.

The company led by Elon Musk purchased Bitcoin in 2021. At the time, the price of BTC was losing steam as it traded around its current levels, but when Tesla announced its decision, the cryptocurrency was able to climb into uncharted territory.

The company bought bitcoin as a corporate strategy to hedge against inflation and as a tool to increase its cash flow. Hence, why it is important to understand the reasons behind this BTC sale.

According to Wittgenstein, there are three possible scenarios, where the company needs to raise funds, there are climate concerns about the alleged energy consumption of BTC, or a complete loss of confidence in the cryptocurrency. The first scenario is the most bullish, and the last is the most bearish.

Why did Tesla sell its Bitcoin?

NorthmanTrader founder Sven Heinrich believes that Tesla followed through on the company’s strategy when the price of bitcoin fell below $20,000. The company forced itself to liquidate part of its assets to preserve its cash flow. Henrich He said:

In terms of trading: TSLA in US dollars got a so-called margin and liquidated a large portion of its digital asset portfolio to make free cash flow positive and improve its balance sheet.

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So far, Wittgenstein’s first scenario appears to be in play. If the crypto market can stay on its current trajectory, despite the Tesla news, BTC price could reclaim the important $27,000-plus area.

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