The crypto market went into a phase of ‘What now?’ after the news of Tesla selling off 75% of its Bitcoin holding came out. However, the electric car manufacturer’s step toward selling its Bitcoin holdings for $936 million in the second quarter. With the relationship between the Chief Executive of Tesla, Elon Musk and Bitcoin, it is never clear what the Tech mogul has in mind.
Soon as the news came to being, Musk made a statement of their decision to sell of 75% of their BTC holdings is not related to any intent toward the crypto asset. Though, the move of Tesla to sell the BTCs had an effect on the market value of one of the top crypto assets as BTC’s value went down 6%, as per a CoinDesk report.
With the fall in the value of Bitcoin, the altcoins had a nice run. With Polygon, Cosmos, and Ethereum garnering a spike in their values due to various reasons. MATIC has a lot going on at the moment with Disney’s partnership for the accelerator program to almost 50 Terra projects migrating to the blockchain. Similar to MATIC, the Ethereum Blockchain is migrating to a Proof of Stake consensus mechanism from their previous Proof of Work mechanism via The Merge. These advancements in the various altcoin projects have propelled the values of the tokens amidst the crypto winter that started back in May 2022.
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According to the CoinDesk report, ‘the largest crypto token by market capitalization was recently trading at about $23,100, down more than a half percentage point over the past 24 hours. The second, consecutive daily decline following an early week rally underscored Tesla CEO Elon Musk’s influence among digital asset investors. Musk’s utterances about bitcoin and dogecoin (DOGE) have sent markets for those assets intermittently soaring and plunging for much of the past two years.’
Edward Moya, senior analyst at Oanda Americas has stated, “Bitcoin was showing signs of a potentially meaningful breakout, but that quickly came to an end after Tesla reported earnings,” Following the statement Moya also noted that this step by Tesla or Elon Musks’s approval of the BTC sale should not come as a shock to the investors or the crypto enthusiasts. This is so because of the ongoing crypto winter phase and the comments Musk made about a month ago, at the Qatar Economic Forum which went along the lines of him not recommending people to invest in crypto.
However the comments, during the quarterly report from Tesla, Musk explicitly mentioned about their DOGE holdings along with confirmation that his other company, SpaceX is to soon join Tesla in making DOGE one of the payment options.
Looking back, in one year, Tesla has gone from acquiring Bitcoin worth $1.5 billion to selling of 75% of that holding to liquidate $936 million. Tesla also decided to let users use Bitcoin to buy cars from the company but halted the procedure in May 2021, due to huge power requirements and its effect on the environment from the extensive use of coal and other fossil fuels to mine the crypto by miners who mine Bitcoins. The crypto asset was on the recovery and had reached the point where a single Bitcoin was valued at more than $24,000 on Wednesday since the crypto winter started. After the announcement from Tesla, as of Thursday morning, BTC Price had fallen well below the $23,000 mark. However, the crypto asset is seeing a spike in its value and has crossed the $23k mark as of Friday morning.
Additional Read: Why is Ethereum Price Rising Today?