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Musk was beaten in the face again, Tesla sold 75% of bitcoin, and other institutions may follow suit

Time : 11/05/2022 Author : 16a7rd Click : + -
        On July 20 local time, Tesla released the second quarter financial report of 2022, which showed that it had converted about 75% of its bitcoin positions into legal tender. The bitcoin sold by Tesla during the quarter added $936 million in cash to its balance sheet, and the average selling price of a single bitcoin was $29000. The company's income statement showed a related loss of $106 million. "Tesla's 75% reduction in bitcoin is a landmark event." Caikailong, a financial technology expert, said that this shows that the expected trend of bitcoin in the market has been divergent. It is not as firm and optimistic as before, and other institutions will slowly start to reduce their holdings of bitcoin.
        He further explained that if the institutional funds follow Tesla to reduce their holdings, it is not a good thing for the currency circle. Without the inflow of "living water", cryptocurrency is difficult to continue its "boom". After the release of the financial report, the price of bitcoin immediately fell by about 1.5% to about $23300, but after musk made a telephone comment, the price of bitcoin rebounded to its previous level. However, after that, its price continued to fall, and was about $22800 as of press time. Third party market data showed that the price of bitcoin was close to $46000 at the beginning of the second quarter of this year, while the price was less than $19000 by the end of the second quarter. This means that Tesla chose to sell its bitcoin early in the second quarter.
        Before the announcement of the financial report, Barclays analyst brianjohnson said that if Tesla did not sell its bitcoin holdings, it might cause the company to lose $460million in the second quarter. The "roller coaster" market of cryptocurrency allows investors to convert from gains to losses in a moment. By the end of the first quarter of 2022, Tesla had held about 42000 bitcoins with a book value of about $1.26 billion, which was about $2billion at the end of last year. Tesla first bought bitcoin worth $1.5 billion in January 2021. At that time, the price of bitcoin was more than $30000. Tesla's move also led to the rise of bitcoin by nearly 20%.
        It is worth noting that Tesla CEO musk has always been one of the important supporters of cryptocurrency. His comments on cryptocurrency on social media often become an important factor driving up the prices of dog coin and bitcoin. Two months after Tesla first bought bitcoin, the company announced in late March that it would accept bitcoin as a payment method for car purchases. However, the decision was finally revoked in May last year due to "the negative impact of bitcoin mining on the environment". At that time, musk said in the statement on social media that Tesla would not sell its bitcoin. At the same time, he also said that when mining is transitioning to more sustainable energy, bitcoin will be re used for trading.
        For the reason of selling 75% bitcoin this time, musk explained at Tesla's earnings conference call that he would improve the company's cash flow and be open to increasing his holdings of bitcoin in the future. "It is important for us to maximize Tesla's cash position." Musk said. "We are certainly willing to increase our bitcoin holdings in the future, so this sell-off should not be regarded as a judgment of the trend of bitcoin, just because we are worried about the overall liquidity of the company.". However, Musk's remarks were "very far fetched" in CAI Kailong's view. He pointed out that Tesla's current cash and cash equivalents were still around $10 billion, compared with more than $900 million in cash obtained from this sale, which was a very small figure.
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