In a shocker to the crypto world, Elon Musk’s company revealed that it has converted about 75 per cent of its Bitcoin holding into fiat currency, which added about $963 million to its balance sheet.
However, the automobile major in February 2021, had announced that it had invested about $1.5 billion in Bitcoin but subsequently sold 10 per cent of its stake in April, just two month later.
Tesla also mentioned that its crypto holding now has dropped to $218 million, Bitcoin impairment hurt second-quarter profitability. The announcement weighed on the crypto market, which saw solid profit booking after the latest rise.
Tesla’s Chief Executive Officer Elon Musk said on the earnings conference call that the company sold the Bitcoin to maximize its cash because of Covid related uncertainty. He added that the sale should not be seen as ‘a verdict on Bitcoin.’
However, the clarification from the mercurial technocrat did not help the crypto sentiments much as the numero uno crypto asset, which was at the $24,200 mark on Wednesday, plunged over 6 per cent to $22,700 levels on Thursday.
On Thursday, the token was struggling to regain $23,000 level at 13.30 hours IST, with its total marketcap dropping below the $450 billion mark and volumes plunging about 9 per cent to $43.25 billion, according to Coinmarketcap’s data.
The selling by Elon Musk has hurt the crypto sentiments as the mercurial technocrat has been a staunch supporter of digital assets, but there is no denial that he always has prefered Dogecoin over Bitcoin.
Edul Patel Co-Founder CEO of Mudrex said that his fancy for Dogecoin is not new. “After this sale, Musk took to Twitter saying that Tesla had not sold any of its Dogecoin holdings which can further trigger the price of the largest memetoken.”
Prior to this, Musk had criticised Bitcoin citing the adverse impact of Bitcoin mining on the environment. His company stopped accepting Bitcoin last year, but continues to accept Doge for merchandise sale.
You can now buy a Tesla with Bitcoin
— Elon Musk (@elonmusk) 1616569360000
One should not forget crypto has been the worst performing asset class in the year 2022. Bitcoin has lost about two-third of value from its peak of $67,800, hit in November 2021.
Even the total market capitalisation of all the crypto assets has plunged near the $1 trillion mark, which was around $3.1 trillion during its golden days.
Sathvik Vishwanath Co-Founder CEO Unocoin said that there is nothing to be surprised about here. “At the end of the day, investments is just about making additional wealth”
“So when the one identifies that there would be loss making proposition they do tend to exit and take the re-entry at a future date,” he added.
