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Tesla Sold 75% of Their BTC: Will It Influence a FUD?

BlockNews Team by BlockNews Team
July 21, 2022
in Business, Crypto
Reading Time: 4 mins read
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Tesla Sold 75% of Their BTC: Will It Influence a FUD?
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It is no secret that the financial markets have been volatile this year. Thousands of people have lost money because the value of their investments has dipped. Large companies like Tesla and General Motors have taken a hit, and many investors are concerned about whether they will recover. Many believe Tesla’s stock plummeted due to its recent decision: it sold 75% of its Bitcoin holdings. 

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According to Tesla’s financial statements, the company’s net Bitcoin holdings were relatively stable for three consecutive years. At the end of March 2019, Tesla’s digital assets were valued at $1.261 billion.

As a result of the liquidation, Tesla now holds $218 million in digital assets. Following the sale in March 2021, Tesla netted $128 million. 

Why Did Tesla Sell Bitcoin?

Two months before Tesla bought $1.5 billion worth of BTC, it became one of the largest corporate Bitcoin holders in January after purchasing $1.5 billion worth of BTC.

When Tesla first bought Bitcoin for $1.5 billion in February 2021, it rose a massive bull run for the market.

At that time, Bitcoin was once again trending after the 2017 fiasco. Altcoins, including Ethereum, Ripple, and several other tokens, rode with the green wave until May 2021. 

Musk noted that the sell-off was to prove Bitcoin as a liquid alternative to having cash on the ledger. Even though more trusted investors such as Warren Buffet and Bill Gates outspokenly stated that cryptocurrency is full of deception, others have defended its worth, including Mark Cuban and Robert Kyosaki.

A Brief History of Elon Musk’s Opinion on Bitcoin

Since Bitcoin was introduced in 2009, it has been the subject of many debates. Some experts believe it is here to stay, while others believe it is on its way. Meanwhile, some governments are looking to regulate crypto mining and trading, while other countries are taking a more laid-back approach and keeping an eye on the situation. 

One of the most notable people to weigh in on the topic is Elon Musk, the CEO of Tesla and SpaceX. When asked about his thoughts on Bitcoin, Musk responded that he believes the cryptocurrency is “not a fraud” but a “good alternative” to fiat.

He also shared his opinion towards Dogecoin, citing how it would be funny if DOGE turns up as the best-performing cryptocurrency in the market because the community deems it valuable. Since then, he called himself the “dogefather,” influencing the price of DOGE from $0.04 to $0.77 in just a few weeks. 

Does This Mean The End for Tesla’s Investment in Crypto?

After Musk’s company sold 75% of its Bitcoin holdings, many believed that they were ending their interest in digital currencies. However, this news prompted many to wonder whether Tesla would invest in other coins, including DOGE and ETH. While it is true that the price of ETH has risen recently and the popularity of this token has grown, it is too early to tell what kind of investments Tesla will make in the future. 

Moreover, this move may not indicate that Tesla will leave the crypto sphere for good. After all, many companies selling their stocks usually hold on to a certain share. They may even buy more if the price decreases. Tesla could be doing the same thing with digital currencies. The company may sell enough to cover its expenses while holding the rest until the price is more favorable.

How Will The Loss of 75% of Its Bitcoin Portfolio Impact Tesla?

The loss of this much BTC would usually be a cause for concern, but the company’s stocks are doing alright despite all the recent lowdowns for the entire market. Since the value of Tesla’s stocks dropped slightly during the same period, investors were concerned about the company’s future.

Yet, with the constant fear in the Bitcoin market and the recent selling of Tesla’s coins, it will create a divisive community of people panic-selling and individuals holding no matter what happens in the economy.

Where Will Tesla Head Next?

It is hard to know what the future holds for Tesla, but one thing is certain: This company is not afraid to take risks and make bold decisions. While many companies keep their money in conservative investments, such as government bonds or stocks, Tesla’s CEO has proven that he is not afraid to put money into cryptocurrencies. 

While it is speculated that the company lost money selling its Bitcoin holdings, they also have more cash to play around. We don’t know what Tesla will do with this extra cash, but it is safe to assume that it will be put to good use. After all, Tesla is a company with a lot of potential and a bright future ahead.

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