electric car company Tesla Corporation TSLA Bought $1.5 billion from Bitcoin Bitcoin / US Dollar January 2021. After two sale, the company now owns less than $250 million of the leading cryptocurrency. Did the timing of the recent sale help push Bitcoin to the crash?
what happened: Tesla announced Wednesday in its second-quarter earnings report that it converted 75% of its bitcoin holdings into fiat currency during the quarter.
“The transfers in the second quarter added $936 million in cash to our balance sheet,” the company said.
After the sale, the company has $218 million of digital assets left on its balance sheet, which could include both Bitcoin and Dogecoin DOGE / USDwhich you accept as a payment option for the merchandise.
Benzinga reported Wednesday that Tesla’s $1.5 billion worth of Bitcoin is worth $1.426 billion when accounting for past sales and the remaining amount on its balance sheet.
Bitcoin could be worth a lot less if Tesla doesn’t mark a sale in the second quarter, it probably will be.
A report from CoinDesk stated that Tesla held about 42,000 bitcoins in the second quarter. Based on sales of $936 million, the average price of bitcoin sold was around $29,000.
Bitcoin traded above $30,000 in April and early May. By June 11, bitcoin had fallen to a 52-week low of just under $27,000.
Bitcoin’s massive drop occurred from June 13 to June 18 with the cryptocurrency hitting a new 52-week low of $17708.62 on June 18. Tesla’s bitcoin sell-off occurred before the cryptocurrency crash in June.
A look at past events shows that the time period from June 12 to June 18 included several big events for Bitcoin.
Related Link: Did Tesla Make Money Buying $1.5 Billion Bitcoin?
Why is it important: on June 12 Celsius It said it was temporarily halting withdrawals, swaps and transfers for account holders “due to harsh market conditions.”
Main filter for degrees Celsius and 3AC Reported on June 17th by Benzinga. Celsius 7206 WBTC registered WBTC / USD As collateral to reduce the Bitcoin liquidation price to $16,582.
Selling pressure has been observed on the cryptocurrency market, with crypto lending and borrowing firms facing liquidity issues.
In July, degrees Celsius, 3AC and Voyager Digital LLC VYGVQ It was among the companies that filed for bankruptcy due to problems they encountered in June and July.
Tesla will likely sell the majority of its bitcoin in the latter half of May or early June, given its trading ranges and how much of the cryptocurrency it holds.
The massive sale of nearly $1 billion in Bitcoin by Tesla could have contributed to the crash in Bitcoin and other cryptocurrencies.
CEO of Tesla Elon Musk He previously said that the company can sell bitcoin depending on market conditions. Musk added a reason behind the company’s decision to sell a portion of BTC in the second quarter.
“The reason we sold a bunch of our bitcoin holdings was because we weren’t sure when the COVID lockdowns in China would ease,” Musk said. “Therefore, it was important for us to maximize our cash position given the uncertainty around the shutdowns.”
Based on Bitcoin’s trading range on June 30, the $218 million remaining digital assets on Tesla’s balance sheet, the company could have between 10,823.61 BTC and 11,639.29 BTC.
TSLA and BTC price action: Tesla shares rose 0.61% to $820.11 on Friday.
Bitcoin price is up 1% to $2,3173.37 in the past 24 hours at press time.
Photo: Created with an image from Steve Jurvetson on Flickr