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It’s true, Tesla already offered virtually a billion {dollars} in BTC and the market took it like a champ. Of course, the worth 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, the whole lot is smart

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 rationale, 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, but it surely proved it had the liquidity to handle this huge sell-off. 

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

Then, when Tesla introduced the sell-off, the market reacted emotionally. Our sister web site 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 $22.634, so the belief that Tesla has paper arms did have an effect. However, it wasn’t as dangerous 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.

BTC value chart for 07/21/2022 on Bitstamp | Source: BTC/USD on TradingView.com

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 seem to be Tesla was attempting to decorate up its books. It doesn’t seem to be they profited from the sale, some reviews even estimate that they misplaced cash on the commerce. The “covid lockdowns in China” seem to be 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 like Tesla panic offered. If this proves to be true, anticipate to see tweets, memes, and suppose items on how a lot the corporate would have made if their arms weren’t product of lettuce each time bitcoin pumps. 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