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How Tesla moves the crypto markets

Anyways besides macro factors there were a few crypto specific factors that moved the market last week.

The one that everyone’s talking about is the revelation that tesla sold 75 of its btc holdings which of course caused crypto to dip as most of you will know tesla famously revealed that it had bought 1. 5 billion dollars worth of btc early last year. An announcement which eventually led to the massive crypto rally we saw in the months that followed. Some of you might also recall that tesla sold 10 of its btc holdings shortly afterwards. To quote prove liquidity in plain english – the company wanted to prove to shareholders that it could sell off a large amount of btc at a moment’s notice if required at least according to tesla ceo elon musk.

Even with this 10 sale when the crypto market hit its peak in november last year tesla’s btc holdings were worth. Well over two billion dollars nearly double the dollar value of what the company had initially invested after tesla’s recent sale. However the company now holds just 218 million dollars of quote digital currency. A figure which apparently includes an unspecified amount of dogecoins (doge). If you’re wondering exactly how much btc tesla sold the answer seems to be close to 1 billion worth.

If you’re wondering how tesla was able to sell such a large amount of btc the answer is over-the-counter or otc. Basically trades that take place directly between people not on exchanges. This is why it’s unlikely that tesla’s btc sales had any direct effect on btc’s price. Not only that but the sale likely happened some time ago so whatever direct effects tesla’s btc sales did have on its price have already come and gone. The reaction to the news by the crypto market after the fact is irrelevant.

What is relevant however is the reason why tesla sold so much of its btc and what it plans to do going forward. In an earnings call Elon explained that tesla sold its btc because of the constant supply chain disruptions. The company is experiencing notably from China whose zero cough policy continues to put the country into lockdown. This confirmed my suspicion that tesla was forced to sell some of its btc stash case in point Elon emphasized that this sale should not be interpreted as a change in the company’s stance on crypto and that tesla is open to buying back all that btc in the future likely when all the macro headwinds the company is facing start to calm down. Unfortunately there was no news from Elon about when tesla will begin accepting btc as payment.

Something he said the company would do once most btc was being mined with renewable energy. Well in case you missed the memo around 60 of btc is now being mined with renewables so where you at Elon jokes aside there are a couple of publicly traded companies that could follow tesla’s lead if this week’s tech earnings confirm the sector is getting squeezed. .