New Reason For The Market Crash Revealed: Tesla Sold 75% Of Its Bitcoin In Q2

    It’s true, Tesla already bought virtually a billion {dollars} in BTC and the market took it like a champ. Of course, the value fell beneath the earlier all-time excessive for the primary time in bitcoin’s historical past, however there are clear causes for that. The Tesla dump wasn’t amongst these causes till yesterday night time, when the corporate’s quarterly replace for Q2 hit the Internet. Now, every thing is sensible

    Tesla’s report says:

    “Quarter-end cash, cash equivalents and short-term marketable securities increased sequentially by $902M to $18.9B in Q2, driven mainly by free cash flow of $621M, partially offset by debt repayments of $402M. As of the end of Q2, we have converted approximately 75% of our Bitcoin purchases into fiat currency. Conversions in Q2 added $936M of cash to our balance sheet.”

    As for the explanation, let’s quote CNBC:

    “Musk explained on Wednesday’s call, “The reason we sold a bunch of our bitcoin holdings was that we were uncertain as to when the covid lockdowns in China would alleviate so it was important for us to maximize our cash position.” He added, “This should be not taken as some verdict on Bitcoin.”

    The Twitter-addicted CEO hasn’t addressed the problem on the social media platform. Yet.

    Tesla ‘s Paper Hands, What Do They Say About Bitcoin?

    Let’s recap. First, Do Kwon’s ill-fated experiment of an algorithmic stablecoin failed miserably. The Luna Foundation Guard needed to promote roughly 800K cash to attempt to defend the UST peg to the greenback. The bitcoin market suffered, certain, however it proved it had the liquidity to handle this huge sell-off. 

    And now we discover out that at roughly the identical time, Tesla was additionally promoting. Did they panic promote as a result of they bought scared by Do Kwon’s antics? Hard to inform. At what worth did they promote? Hard to pinpoint. The solely factor we all know for certain is that they bought one other billion {dollars} value of BTC and the market took a budget sats out of their arms with out flinching. Sure, the value declined to depths beforehand unknown, however it’s already bouncing again.

    Then, when Tesla introduced the sell-off, the market reacted emotionally. Our sister website NewsBTC informed:

    “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.”

    At the time of writing, bitcoin is buying and selling at $22.550, so the conclusion that Tesla has paper arms did have an effect. However, it wasn’t as unhealthy as everybody was anticipating. Especially making an allowance for that, again within the day, Tesla’s preliminary bitcoin funding was a key consider sending BTC to the stratosphere.

    BTCUSD price chart for 07/21/2022 - TradingView

    BTC worth chart for 07/21/2022 on Bitstamp | Source: BTC/USD on

    What Will History Say About Tesla’s Decision?

    Considering Elon Musk hasn’t done the smallest effort to try to perceive bitcoin, the corporate’s sell-off shouldn’t shock us. Still, it does. It doesn’t look like Tesla was making an attempt to decorate up its books. It doesn’t look like they profited from the sale, some stories even estimate that they misplaced cash on the commerce. The “covid lockdowns in China” look like a weak excuse. And, what does “maximize our cash position” imply on this context? We’ll have to attend and see what the corporate does with the money.

    The truth is, it looks as if Tesla panic bought. If this proves to be true, anticipate to see tweets, memes, and assume items on how a lot the corporate would have made if their arms weren’t made from lettuce. In truth, anticipate to see all of these regardless. The present is simply getting began.

    Featured Image by Tesla Fans Schweiz on Unsplash  | Charts by TradingView

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