Cryptocurrency is a virtual currency widely used among business giants like Elon Musk. Bitcoin is an older and major cryptocurrency occupying the major volume in the cryptocurrency market cap. During the Covid situation, crypto played a major role in the business market. Huge users from various countries started using cryptocurrency as their part of investments.
One among them was Musk who invested more in the major cryptocurrency Bitcoin. The quiet retort to the sale played out differently from the statement in February 2021 that Tesla had invested up to $1.5 billion in BTC.
They are in a plan to improve their savings and investments on Bitcoin with the idea of accepting Bitcoin as payment for certain products and it was later scrapped.
The information at the time boosted Bitcoin’s price instantly by almost $3,000, getting the cryptocurrency to a new all-time high above $43,000.
Swyftx’s head of strategic partnerships, Tommy Honan, spoke to Cointelegraph that Tesla’s determination to buy Bitcoin last year was “as significant a point as you can infer for digital assets:”
Elon Musk's move of investing in crypto has led to other industries' consent to put crypto on their part of investments and a lot of big institutional investors, as well as small and mid-cap companies, rushed into the cryptocurrency market.
Elon revealed that it had sold 75% of its Bitcoin holdings in Q2, adding $936 million in fiat to its balance sheet.
Tesla CEO Elon Musk mentioned that the sale “should not be taken as a verdict on Bitcoin,” clarifying that the move was due to liquidity concerns given the continued COVID-19 lockdowns in China.
In the Covid scenario, it was very crucial to hold our balance sheet during that economic crisis. Now the situation has settled and they need to improve cash flow on business operations, and they have sold crypto holdings.
Musk said the cryptocurrency was a “sideshow to the sideshow” of Tesla’s main aim, is “to rev the advent of stable energy.”
Markus Thielen, chief investment officer at Singapore-based digital asset manager IDEG, stated that Tesla sold off their crypto assets as it was a deviation from its core business.
It is not surprising if Tesla keeps pecking in Bitcoin when Bitcoin stabilises, otherwise they would have sold 100%.”
Crypto industry experts are largely unfazed by Tesla’s decision to sell 75% of its Bitcoin (BTC) holdings, saying it’s a fairly usual plan for companies to improve cash flow during economic slowdowns.
Comparison site Finder’s share trading expert Kylie Purcell illustrated that the electric car manufacturer hasn’t been alone in its decision to “shore up capital in cash currencies.”
With the world heading into an economic slowdown and possibly a slump, it is usual for investors and companies to move capital away from more volatile assets.
The price of Bitcoin dipped following the announcement, there are already signs of recovery. Bitcoin’s price fell roughly 2.6% as a result of Tesla’s announcement. Bitcoin price returned to $23,299.
Tesla's move does not affect the crypto community as the crypto industry extends globally. For example, Cryptocurrency exchanges like Binance are growing tremendously.
Cryptocurrency exchanges are emerging with rising demands. One can start crypto trading platform with the help of cryptocurrency exchange development companies.
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