Tesla has sold 75 percent of all holdings in Bitcoin. CEO of Binance believes it does not mean a lot to the wider ecosystem. Binance is known to be the leading crypto exchange worldwide. Its CEO named Changpeng Zhao believes that Elon Musk buying or selling never means much. When he was asked about the recent sale of Tesla that was of 75 percent of its Bitcoin holding he said it. If you are new to Crypto trading and investments then you must check the Bitcoin trading platform www.thebitcoincode.io.
He pointed out that the decision of Elon Musk to buy or sell Bitcoin will not matter. This is because it will never impact the leading crypto’s fundamentals. Elon Musk provided reasons behind the dumps some days back. He revealed that the manufacturer of the electric vehicle required funds for the newly opened factories in Germany and the US.
The current market scenario
Tesla required a better flow of cash for supporting its business in China. It was impacted hugely by the extended lockdown of Covid in this year’s second quarter. The CEO of Binance pledged $500 million for supporting the ambition of Elon Musk for acquiring Twitter. He mentioned that no one is aware of why Elon Musk sold most of the Bitcoin holdings of the company. He also added that the boss of Tesla may require cash for acquiring Twitter.
Sam Bankman-Fried of FTX was heavily involved in companies like BlockFi and Voyager Digital. Yet Changpeng Zhao said that Binance is having maximum exposure to some collapsed lending companies such as Celsius and Voyager. He said that the leading crypto exchange never acted as their debtor or creditor. When he was asked if Binance noticed any risk attached to such firms some time ago, he replied that he thinks that as they are dumb they like doing things in a much simple way. They are a crypto exchange and thus they are not in any loan business.
The leading crypto is down by over 60 percent from the all-time price high of $69000 it already recorded in last year November. Even after the fall in prices, Changpeng Zhao maintained not selling Bitcoin. He was even heard saying that he does not have anything in dollars. All he is having is in cryptocurrencies. Thus when he needs to spend money, he needs to spend some part of the crypto somewhere. He does not need to think about selling his cryptos as crypto is his money.
Tesla sold its holdings
Tesla in its earnings report said that its quarter-end cash along with cash equivalents fell to around $17.1 billion during the first quarter. It was mainly driven by a net outflow of cash of almost $1.2 billion in crypto buys, net debt as well as $1.2 billion in finance lease repayments. It was partially offset by the free flow of cash of $293 million. In 2022’s middle of April, Bitcoin increased in price and set a record high of nearly $64870. The largest crypto in the world was up more than 3.8 percent to nearly $54583.87. On one year-to-date basis, it surged 88.41 percent. While the share price of Tesla Inc rose 1.21 percent to close at almost $738.2 aiding Nasdaq Composite, the Tech-heavy to close at a high-level record in a trade overnight.
Tesla’s Chief Financial Officer Zachary Kirkhorn said that this company invested around $1.5 billion in Bitcoin during the quarter. Then it trimmed the position by nearly 10 percent which contributed to a small gain in the financials in its first quarter. During last year’s first quarter, Tesla reported a $438 million net income. Tesla mentioned in its earnings report that the growth rate will be depending on its equipment capacity, supply chain’s stability and capacity, and operational efficiency. Tesla shared a report that its total revenue grew by 74 percent on year in 2021’s first quarter.
Conclusion
In one filing with the US Securities and Exchange Commission in this year February, Tesla mentioned that it purchased Bitcoin for high flexibility to diversify further and maximize all returns on its cash. Tesla too said that the organization will begin to accept payments in Bitcoin in exchange for its products, subjected to all applicable laws and first on one limited basis.