The hottest news on the cryptocurrency market right now is about Tesla selling 75% of all the BTC it had on its balance sheet. Elon Musk, Tesla CEO, said on the earnings conference call that the sale shouldn’t be seen as “a verdict on Bitcoin.” 

Tesla Sold 75% of Its BTC: What’s Elon Musk Up To?

According to the entrepreneur, the sale was necessary to “maximize the company’s cash position” and hedge against liquidity problems. But if we take a look at the report, it turns out that cash and its equivalents in Tesla’s accounts grew by $0.8 billion to $18.3 billion by the end of Q2 2022.  

Let me remind you that Tesla was recently considered the second largest public company owning BTC, based on CoinGecko data. We also know that the BTC sale brought in $936 million, which is larger than the value of Tesla’s cash and cash equivalents by the end of Q2. So, is selling BTC an attempt to hide losses? Maybe. If the company had reported a loss, its stock would surely have fallen. However, the company showed a profit and created a great newsbreak — Tesla (TSLA) shares on the NASDAQ stock exchange rose by more than 7% in less than a day after the information appeared in the media. 

Crypto is “not something we think about a lot,” Elon Musk said during the call with investors. 

But Musk’s actions and statements suggest otherwise, except that they focus more on DOGE than BTC. Nevertheless, Tesla’s management was definitely thinking about BTC. The company’s balance sheet had 43,200 BTC. I’d like to note that this figure isn’t official because the company didn’t disclose the exact amount of BTC in its accounts, but it’s the most common figure based on indirect data. The report states that 75% of all existing BTC was sold, so by simple calculations, we can find out the “exact” amount of bitcoins sold — 32,400 BTC. If the sale has brought the company $936 million, it means that the average Bitcoin price is $28,800. Therefore, the sale took place before June 11, as BTC never rose above this value after. Such big deals usually don’t occur at once but are divided into plenty of small transactions. In short, it’s “not something we think about a lot,” yet we’re gradually dropping that amount of BTC — sure, sorry, but that’s “nuts!”

We are certainly open to increasing our bitcoin holdings in the future,” Elon Musk said during the same conversation with investors. 

It’s hard to say for sure how deeply the Tesla CEO understands crypto market dynamics, but you don’t have to be as smart as a whip to see the obvious — the trend is bearish, and the fall will continue, not just in the cryptocurrency market but the economy as a whole. That’s what the Bank of America’s survey data shows. A survey of 259 respondents with $722 billion under their management found the most pessimistic sentiments among stock market participants since October 2008. This isn’t surprising given what’s happening in international relations, the impending food crisis, the rate of inflation, and the prospect of a global recession. 

Similar sentiments prevail among participants of the cryptocurrency market — about 60% expect BTC to fall to $10,000. This outlook becomes even more apparent with a perspective analysis, which was carried out by analysts at Grayscale Insights. Briefly, the market has just entered a bearish phase lasting about 250 days. In addition, BTC still has room to fall, because the price has dropped by 73% and 84% of ATH in past cycles, however, the current drop is “only” 67%. Each subsequent fall is more significant than the previous one. So, there is every reason to expect BTC to be around $10,000. 

Hence the question arises — did Elon Musk sell a bear? This is an excellent chance to kill several birds with one stone: 

  • to keep a nice picture of constant growth in the report; 
  • to show quarterly earnings; 
  • to support the stock market. 

All this by selling a high-risk asset, which hasn’t yet completely lost its value, although the movement in this direction is already obvious. And then, once “at rock bottom,” to buy back the same 30,000, 40,000, or 50,000 BTC, but entering the position in a much more favorable situation. This will provide the opportunity to demonstrate nice figures, resting on the laurels of a visionary. 

Why not? 

Author: Evgeny Tarasov