The hottest news in the cryptocurrency market is now the sale of Tesla 75% of all BTCs that had on the balance sheet. Elon Musk, CEO of Tesla, said on the earnings conference call that the sale should not be seen as “doom for bitcoin.”
According to Elon Musk, the sale was needed to maximize the company’s cash position and insure against problems. But if you look at the report, you’ll find that Tesla’s cash and cash equivalents rose by $0.8 billion to $18.3 billion at the end of the second quarter of 2022.
Tesla was recently considered to be the second largest public company holding BTC. It should also be noted that the sale of BTC brought in $936 million, more than the value of Tesla’s funds and equivalents at the end of the second quarter.
So, is the BTC sale an attempt to hide losses? If the company had reported a loss, its stock would likely have fallen. However, the company showed a profit and created a great news story – shares of Tesla (TSLA) on the NASDAQ exchange rose by more than 7% in less than a day after the news appeared in the media.
The company had 43,200 bitcoins on its balance sheet – this figure is not official, as the company does not disclose the exact amount of BTC in its accounts, but this is the most common number based on indirect data. The report states that 75% of all BTC in existence were sold, so with some simple calculations, we can find out the “exact” number of Bitcoins sold is 32,400 BTC. If the sale brought the company $936 million, that means the average bitcoin price is $28,800. The sale took place before June 11, as BTC never rose above this value after that. Such large transactions usually do not happen all at once but are broken down into many small transactions.
It is difficult to say exactly, how deeply the CEO of Tesla understands the dynamics of the crypto market. But the bearish trend and the fall will continue, not only in cryptocurrencies but also in the economy in general.
It is evidenced by the survey data of Bank of America. The survey of 259 respondents with $722 billion under management found the most pessimistic sentiment among stock market participants since October 2008. It is not surprising, considering what is happening in international relations, the looming food crisis, the inflation rate, and the prospects of a global recession.
A similar mood prevails among participants of the cryptocurrency market — about 60% expect BTC to fall to $10,000.
This perspective becomes even more evident in the perspective analysis conducted by Grayscale Insights analysts. So, the market has just entered a bearish phase that lasts about 250 days. Additionally, BTC still has room to fall, as the price has fallen 73% and 84% from ATH in the past periods. However, the current drop is “only” 67%. Each subsequent fall is more significant than the previous one.
Therefore, there is every reason to expect that BTC will be worth around $10,000. It begs the question, has Elon Musk sold a bear?
Musk also emphasized that Tesla is open to future investments in Bitcoin. However, the company did not sell “any” Dogecoin. He previously said that he would continue to support the coin despite the market correction.
We will remind you that in February last year it became known that Tesla invested $1.5 billion in Bitcoin.
Elon Musk called these investments “quite risky”. As early as April 2021, Tesla sold part of its assets in the first cryptocurrency for $272 million.
