Tesla Sells 75% of its Bitcoin and Elon Cancels Twitter Deal
During the week of July 17th, Bitcoin HODLers everywhere rejoiced as Bitcoin finally began to rally after about a month of staying around it’s $20,000 slump. But, during the brief spike, many companies began to sell their Bitcoin, and Tesla was rumored to be one of them.
Wondering what this Bitcoin sale means for the market? Read on to learn more about Tesla, their Bitcoin holdings, and future predictions regarding cryptocurrency.
Tesla Cancels Bitcoin Payments
Although Tesla’s CEO, Elon Musk, is famous for his acceptance and promotion of cryptocurrencies, the company itself has had a rocky history with Bitcoin. In March 2021, the company announced that you could purchase your Tesla vehicle completely in Bitcoin.
But, then in May 2021, the company quickly retracted that statement saying that due to environmental concerns, they would no longer be taking any Bitcoin payments. Regardless of that announcement, Elon Musk stated that the Tesla company held large positions in the Bitcoin, over $1.5 billion. Some of the purchase orders the company made were so large that they caused Bitcoin to increase 14% in a single day.
At first Musk was adamant about the future of Bitcoin, stating that he felt it would, someday, be worth 1.5 billion per coin. Then 2021 came to a close, and things began to change.
Tesla Sells Bitcoin
Although it wasn’t made public at the time, during Q2 of 2022, Tesla sold 75% of its Bitcoin holdings, a move which came to light when public documents were posted earlier this week. While this may not seem like a big deal, seeing as a single purchase order from Tesla was able to raise Bitcoin prices 14%, it can now be assumed that these sales caused part of the Bitcoin crash seen in May and June.
When interviewed about why Tesla sold its Bitcoin, Elon Musk is still adamant that he believes in cryptocurrency as a whole, however, due to unceasing COVID19 restrictions in China, Tesla had to have more cash on hand. Supposedly, Elon Musk still retains his personal stash of Bitcoins.
While the company stated they wanted to have more cash holdings, it is unclear why this is. Experts suggest that Tesla is facing supply chain issues for parts manufactured in China, as well as sales losses as people are unable to afford Teslas. Or perhaps, the company needs money for future product development, either way, Elon Musk didn’t comment further on Tesla’s future moves.
What is Going to Happen to Bitcoin?
It sounds scary to hear that Tesla will sell such a large portion of its holdings, but it’s critical to remember that this sell off has already happened. This means that you don’t need to worry about Bitcoin price crashing due to Tesla selling their portion as any crash resulting from this sale has already happened.
Many believe that Bitcoin has hit it’s floor, and, as in times past, will soon be rising to new heights. Many celebrities have remained on the Bitcoin train through this last downturn, namely Kevin O’Leary and Elon Musk. They both seem to be very die hard on the currency and it will be interesting to see if their opinions stay that way.
Currently, several governments around the world are preparing to try to regulate cryptocurrency, namely the UK and the US. Of course they can try, but several cryptocurrencies, like Bitcoin, are extremely difficult to regulate, so it’s unclear how they will manage to do so. Either way, Bitcoin is on a positive trajectory that we would like to believe it will continue.
As for other cryptocurrencies, it’s hard to say. Many of the smaller coins like SHIB and DOGE took quite the beating despite celebrity endorsements. And with the crash of Terra’s LUNA, there are definitely several cryptocurrencies which won’t be returning even if the market continues to rally.
Elon Musk Backs Out of Twitter Deal
While Bitcoin may be on the mend, Twitter stock sure has taken a dive. Apparently, after several months in negotiations with Twitter, Elon Musk has officially backed out of his proposal to purchase controlling shares within the company.
According to the motion filed to cancel the purchase, Twitter has been doing some shady things the past few months. Musk’s attorneys state that they have been refusing to provide information, or have been providing information which is incomplete—meaning Elon Musk was unable to perform the analysis he wanted to complete prior to the purchase.
Much of this analysis centers around the number of bot accounts which are currently active on the platform. Musk states this information is essential for knowing how much potential advertisers will get for their investment.
Not only that, but apparently Twitter has been laying off some high ranking team members, firing it’s talent acquisition team, and a lot of other moves that have made Elon rethink his desire to invest in the company.
Of course Twitter isn’t going to let this go so easily, and they have stated that they plan to sue Elon Musk over the cancelled deal. They are confident they will win, forcing the billionaire to go through with the purchase or pay up.
Should You Buy Bitcoin?
Here at MintDice.com we never think it is a bad time to buy Bitcoin. While we don’t have a crystal ball showing us the future, if you would like to get involved in cryptocurrency, now is the time to do so. Just remember to stick to products which are researched and backed by technology (like Bitcoin or Ethereum) and research everything before you buy. You also shouldn’t invest any money you don’t intend to lose.
But look at it this way, if you had invested in Twitter you would be hurting a lot right now too, so buying Bitcoin really isn’t that much worse that investing in a single stock in the stock market.
Need help learning about how to buy cryptocurrency? Read our article on the subject by clicking here.