As the broader crypto market continues to extend its downward trajectory, old speculations about Tesla and Bitcoin have resurfaced. Shortly after sparking another sell-off in the world’s largest cryptocurrency, Elon Musk, who calls himself Tesla’s “Tech King,” pointed out that his company hasn’t sold any Bitcoins yet. .
However, according to Liam Denning’s recent comments on Bloomberg, Musk’s electric car company may have done the unexpected.
“I’m really starting to think that Tesla Inc. may have sold some Bitcoin this quarter. I know Elon Musk tweeted otherwise, but that’s not always solid proof.”
Obviously, April wasn’t favorable for Tesla, but the company turned the tide in May. With the rally in corporate stocks on Wall Street, Tesla’s market capitalization increased further. Don’t forget, Tesla’s sales in China also rebounded in May, giving the company a sigh of relief.
Tesla sales in China in May | The source: Liam Denning
However, Tesla’s new Model S “Plaid+” version has been delayed accordingly Notification Musk’s latest and, therefore, Tesla could face pressure in both sales and profits. According to Denning, this is one reason that increases the likelihood that the electric vehicle company will sell Bitcoin.
Bitcoin investor Preston Pysh recently covered this story in a podcast. He is highly skeptical of Tesla adding Bitcoin to their balance sheet in the first place. He further confirmed the reason:
“Simply because they don’t have the free cash flow that warrants such a bold strategy.”
However, Pomp Investments’ Anthony Pompliano previously predicted a likely scenario in which he claims Tesla is looking to reach a new segment of customers from the Bitcoin mining space. Agreeing with the views of investment strategist Lyn Alden, Pysh asserts:
“Elon is a major public figure and is learning in public.”
In addition, the value of Bitcoin held by Tesla has clearly fallen below the average where the company invested $1.5 billion earlier this year, and if sales in China fail this month, there could be the possibility of many more unexpected things to happen. According to CryptoTreasaries, Tesla holds 38,300 BTC purchased at an average cost of $34,700.
Bitcoin price and average from 1/1-7/2/2021 | The source : Bloomberg
The famous adage “Every action has an equal opposite reaction” is even more applicable to the crypto market today, all thanks to Elon Musk. His every action on Twitter creates noticeable price reactions on the chart. The “Elon effect” on BTC price has clearly changed the dynamics of the market completely. Every “unwelcome” announcement from a Tesla executive negatively affects the price of the crypto king and vice versa.
However, at the time of writing, BTC is down just under 1% over the past week and is trading in the $37,000 range.
Bitcoin Price Action Summary After Tesla Moves | The source: Twitter
According to AMBCrypto
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