Cryptocurrency
Bitcoin Recovers After Falling On Tesla’s 75% Stake Sale
(CTN News) – The price of Bitcoin recovered late on Wednesday after a brief sell-off sparked by news that Tesla Inc (TSLA.O) sold about 75% of its holdings.
Musk cited concerns about Tesla’s “overall liquidity” as the reason for the sale.
Cryptocurrency prices last rose 1.04% at $23,494.57 after sliding as much as 0.5% to $23,268.92 on the news.
After buying $1.5 billion of bitcoin at the height of its massive growth and popularity, Tesla sold $936 million worth of bitcoin in the second quarter.
Musk has been an outspoken advocate of cryptocurrencies. Dogecoin and bitcoin prices tend to rise when he makes statements about the future of crypto and discloses his ownership of digital assets.
As Musk said on Tesla’s earnings call, the primary reason for the sale was uncertainty about COVID-19 lockdowns in China, which have created production challenges.
“Maximizing our cash position was important to us,” Musk said. “We are certainly open to increasing our bitcoin holdings in the future, so this is not a judgment on bitcoin. Simply put, we were concerned about the company’s liquidity.”
Despite Musk’s promotion of dogecoin, a meme-based cryptocurrency, Tesla did not sell any.
Tesla accepted bitcoin for less than two months before ceasing to accept it in May 2021. After conducting due diligence on how much renewable energy it takes to mine bitcoin, Musk said the company could resume accepting bitcoin.
Investors appear more optimistic about the US Federal Reserve’s ability to rein in decades-high inflation, as Bitcoin has been recovering along with the stock market this week.
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