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Bitcoin and Other Major Altcoins Tumble, as Tesla Sells 75% of its BTC Holdings

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VOC, Voice of Crypto, Bitcoin

Bitcoin volatility shot up this week after it was reported that Tesla sold 75% of its holdings, or about $936m worth in an attempt to raise cash.

Tesla’s Chief Elon Musk stated that “this should not be taken as some verdict on Bitcoin” because the company sold their bitcoins because they had no idea when COVID restrictions in China would end. He said the company needed to maximize its cash position during the time.

“We are certainly open to increasing our Bitcoin holdings in future,” Musk said during an earnings call, adding that they have not sold their DOGE”

Despite this assurance, the crypto market experienced another sell-off following the correction in Asian stocks.

The price of bitcoin is down 3% from last night’s high but up 13% over the past week. It is currently trading at $23,007.

Bitcoin Price

Bitcoin Price | CoinMarketCap 

The crypto markets are correcting gains after an impressive upside move this week. ETH is down almost 5%, trading below the $1,500 zone, and XRP has trimmed its recent rise and now struggling near the $ 0.35 level. ADA declined 9% today as well trading below the $ 0.50 support.

Tesla Sold a Good Part of its Bitcoin

The electric car company founded and led by Elon Musk, Tesla, sold approximately 75% of the BTC in its possession at some point in the second quarter of this year.

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The Tesla team revealed the information in its recently published earnings report, indicating that it sold a total of $939 million in Bitcoin. This figure corresponds to 75% of the funds initially acquired by the company years ago.

This move leaves Tesla with about $218 million worth of Bitcoin, which is well below the $1.26 billion reported for the first quarter of 2022. Keep in mind that Tesla originally had about $42,000 previously purchased BTC, which is held in custody throughout all these months despite the profits and losses that it entailed at certain times, thus excluding the sale that it made in February 2021 with which it obtained $272 million.

As for this last sale, based on the fact that it reported an income of some  $936 million, this would correspond to an average value of  $29,000 per unit, although the moment at which the commercial operation was completed is not clear.

According to the recent decline seen in the price of the digital currency, this had to have happened at the beginning of the second quarter of this year.

Tesla and BTC, a Complicated Relationship

The relationship between Tesla and Bitcoin has been a particularly sensitive point for the digital currency ecosystem, as the markets welcomed the fact that the company invested part of its capital in BTC funds, as well as the fact that it was accepted for a short period of time for the vehicles market.

However, in May 2021, Musk published a statement informing that Tesla would stop accepting payments with digital currency due to the high carbon emissions associated with the operation of its network.

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This measure had a fairly strong impact on the price of Bitcoin, added to the effect that had already been felt hand in hand with the Chinese government’s refusal to prohibit the mining and commercialization of cryptocurrencies at the local level.

Despite the negative impact of the said measure, Musk joined other figures to promote the creation of an organization dedicated to promoting the use of renewable energy for cryptocurrency mining, in order to mitigate the environmental impact of its use and facilitate the transition to the use of clean electricity for this work.

The tycoon highlighted that Tesla would accept BTC or other digital currencies again once the operation of its networks adheres to much more friendly environmental guidelines.

As for Musk, the tycoon continues to describe himself as a Dogecoin enthusiast, a currency he openly supports and which some of his companies accept as payment for their marketing.

Other Altcoins Market Today

Many altcoins are in the red zone, including DOT, MATIC, AVAX, SHIB, TRX, UNI, CRO, LINK, ETC, XLM, ALGO, BCH, and VET. MATIC is one of the top 100 crypto assets by market capitalization today, but it’s down 14%. The price has still increased 27% in just a day since yesterday.

 

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Jim Haastrup is a freelance blockchain and metaverse writer. He helps founders, investors, startups, crypto, and blockchain enthusiasts connect with their audience and win investment through the written word.

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