Today’s most important question is why Tesla sells 75 percent of its Bitcoin holdings? Let’s see the exact news and see the main reason behind it. The company (tesla) had converted around 75 percent of its Bitcoin into fiat currency by at June end. According to shareholder letters, it added the sum of $936 million to its financial statements.
Elon Musk-owned company Tesla sold a significant portion of its Bitcoin holdings, an investment that allowed the world’s most famous electronic currency. And that is why people ask why they have sold the maximum no of its bitcoins.
By June, the automaker had converted around 75 percent of its Bitcoin into fiat currency and added $936 million of liquid cash in its financial statements in its shareholder’s letters regarding its second-quarter results.
The current Chief Executive Officer Elon Musk stated during a conference call for analysts on Thursday that Covid had sold because of uncertainty about the exact date Covid shutters would end in China. So, why does Tesla sells 75 percent of its Bitcoin holdings? let us see in the coming paragraphs.
“This should not be taken as some verdict on Bitcoin,” Musk stated. “It’s just that we were concerned about the company’s overall liquidity given the Covid shutdowns in China.”
Musk, 51, has emerged as a significant influencer in cryptocurrency in the last year, tweeting praise for Dogecoin and sharing photos of his pet Floki who is, like the Dogecoin mascot, the breed of Shiba Inu. When Tesla hosted a massive celebration for its newly constructed Austin manufacturing facility in April, its drone display included a photo of Dogecoin.
In a speech at a Bitcoin conference in the year 2000, Musk said the three things he owned personally, aside from Tesla and Space Exploration Technologies Corp., including Bitcoin, Ether, and Dogecoin. “I might pump, but I don’t dump,” Musk said.
In February of this calendar year, Tesla first revealed that the company had invested $1.5 billion in Bitcoin and then announced that it had sold 10 percent of its stake just two months after that. Tesla disclosed on Wednesday that its digital assets had shrunk to $218 million and that the Bitcoin impairment has impacted its profitability in the second quarter.
The cryptocurrency has fallen from the record high of $60,000 in November. According to market value, the most prominent cryptocurrency was trading down 1.1 percent to about $22,998 by eleven a.m. in London.
Musk’s support for Bitcoin has inspired the use of digital currency following Tesla initially accepting Bitcoin to purchase goods. The company then halted the payment option in response to environmental concerns regarding its mining practices. This pullback further signals the hawkishness of a crypto market’s most famous bulls in what is known as a “crypto winter.”
Yet, Musk continues to position himself as a crypto-friendly entrepreneur, suggesting that SpaceX could join Tesla by accepting Dogecoin to pay for purchases of goods shortly.
Elon Musk, the Tesla CEO, stated during the company’s earnings conference that it had never sold its Dogecoin.
Shares of MicroStrategy Inc., another essential corporate buyer of Bitcoin, have slid over 4% during the early trading hours Thursday. In June, at the time of writing, MicroStrategy’s Bitcoin accumulation was about $3.4 million less than it was in the previous quarter.
Josh Olszewicz, head of research at the crypto Fund administrator Valkyrie Investments, said rough estimates put Tesla’s Bitcoin sales around the $30k mark and an additional $218 million worth of digital assets in its balance report.
“Strongly bearish market conditions since the beginning of the year as well as the need for cash on the balance sheet likely contributed to this decision,” Olszewicz declared. “From a treasury management perspective, downside volatility may have been too unattractive to ignore in the near term.”
Hope you got the current news and we will make you up to date in the upcoming months. Till then you can share it with your friends who invest in tesla stocks because this is very important news for them.
What is the current value of tesla stocks?
As of July 21, 2022 tesla’s latest stock price is 815.12 USD which is +72.62 (9.78%) today.
Tesla is the most-shorted stock globally, may see an extended short covering rise after investors betting against the maker of electric vehicles suffered $1 billion mark-to-market losses on Thursday. People love to invest in tesla stocks because they give high returns, however, sometimes it also jumps down but overall investors are betting on this company.
This is according to S3 Partners, a short-selling research company that warned its clients in a note on Thursday the possibility of “short squeeze hell” is feasible for Tesla, particularly following CEO Elon made positive remarks during the company’s earnings call.
Read the complete tesla news and how others are reacting to tesla stock news.
The record-breaking production figures in Tesla’s Fremont and Shanghai factories in June prompted Musk to declare that Tesla could have “the potential for a record-breaking second half of the year,” according to the transcript of the conference call. Tesla reported profits for the second quarter that were higher than analyst expectations and drove an increase of more than 10% during trading on Thursday.
The rally on Thursday was also due to short-sell coverage, which happens when short sellers purchase Tesla shares on the market for closing their losses. Tesla’s short interest is currently at a nominal value of $18.5 billion, as per S3 Partners.
In addition, Tesla remains the ninth most sought-after long position in hedge funds. They could be a catalyst for an upward trend driven by momentum as short-sellers try to fill their positions.
“With Tesla’s stock price rallying and short sellers incurring $1 billion of mark-to-market losses today, we should expect its short covering trend to continue as short sellers get squeezed out of their positions due to these large and sudden losses,” S3 Partner’s Ihor Dusaniwsky told the AP.
“These buy-to-covers and the potential for hedge funds to bulk up their positions in a high beta name with a positive price trend may help reverse Tesla’s year[-to-date] price weakness,” Dusaniwsky added.
Tesla stocks are rising by 30 percent from their low in June However, it’s still down 23% from the beginning of the year.
Now we will take some FAQs so that you can clear your doubts.