It is obvious that cryptocurrencies and blockchain projects are making waves in traditional and digital media. This has created huge attention as the global population who follow these influential personalities have been drawn towards the blockchain and cryptocurrency space due to their influence.
As a consequence, some cases are having a huge impact on the crypto market itself.
For instance, it was observed that the sometime last year 2021, the company Tesla announced its intention to invest the sum of $1.5 billion in bitcoin which increased the global awareness associated with the company towards the digital currency.
It was noted that Elon Musk became a global figure as his actions and words became a massive influence, especially in the crypto space.
The value of the holdings of Tesla in Bitcoin eventually increased while the value of Bitcoin began to rise and the company actually saw it as a profitable investment.
However, the winds have changed recently, when Tesla sold circa 90% of its Bitcoin.
Why did Tesla sell a high percentage of its Bitcoin?
Tesla, as a company managed by one of the smartest billionaires in the world, was smart enough to see the Bitcoin holding in Tesla as an investment opportunity and consequently took great advantage of purchasing the coins at a comfortable price.
It also took profit off the table by selling off a sizable portion of its holdings in Bitcoin as was reported in the financial statements on its balance sheet.
The company has already sold three-quarters of its holdings as of the second quarter of the year 2022 and transferred the balance into fiat currency as quoted in its financial statement.
The impact of sales of over $1 billion in any market will always cause a great impact on the dynamics of such a market.
Consequently, knowing how volatile the cryptocurrency market is, most investors upon sighting such withdrawal of funds would be forced to take some of their funds out too and the continuous sales of more Bitcoin would invariably increase the potential dip in the prices of other cryptocurrencies.
What is the Tesla product?
According to Britannica, the Tesla company, which is an American manufacturer of electric automobiles, solar panels, and batteries for cars and home power storage, was founded in 2003 by American entrepreneurs Martin Eberhard and Marc Tarpenning and it was named after Serbian American inventor Nikola Tesla.
However, Tesla Motors was formed to develop an electric sports car which was originally headed by Eberhard who was Tesla’s chief executive officer (CEO), and Tarpenning its chief financial officer (CFO), while Elon Musk was the chairman of the company as he was one of the financial contributors to the company’s growth and development.
Somewhere along the way, Elon bought a majority stake in the company and eventually became the chief executive officer (CEO) of the company and placed the company in a dramatic turnaround that has placed it as the cynosure of all tech companies.
Elon, for who he is as a businessman, did not only have eyes for the development of the Tesla company – he was also known for his foray into other computer projects that are innovative and captivating in nature.
He became the founder of Paypal, which is a digital payment platform for remittance globally by the use of the internet.
It was quoted in some quarters that this ignited his passion and interest for decentralized financing and eventually his desire to venture into cryptocurrency and blockchain technology.
What are Tech stocks?
In simple terms, Tech stocks can be referred to as any stock that is involved in the technology sector, who are responsible for the production of semiconductors for other software providers.
In market analysis, it is observed that Tech stocks are often a leading indicator for the economy and the stock market.
Invariably, a Tech stock is associated with a company that sells products involving sophisticated technology. These are usually high-technology companies that deal with or manufacture electronics, computers, and scientific research for global usage.
What does the BTC selling of Tesla mean to the market?
This movement made by Tesla as it sold 90% of its Bitcoins has severely impacted the price analysis of the entire crypto market in recent months where it was observed that the market dipped by a great margin from its all-time high to over 90% of its total value.
In conclusion, as much as the crypto market encourages the participation of major financial players in the space, it is pertinent to encourage the use of crypto in exchange for value as this is one of the major reasons cryptocurrencies can withstand whatever impact such financial players like Tesla can have in the blooming market as we progress in the near future.