Tesla is BTC Sale and its impact on Crypto Market Sentiment

Tesla is BTC Sale and its impact on Crypto Market Sentiment

 

In an earnings release on Thursday, Tesla (TSLA) announced it had sold 75% of its total Bitcoin (BTC) held on its balance sheet. The company appears to have made a small gain on the BTC sale, which it first announced purchasing in early 2021.

 

Tesla’s initial purchase in 2021 of $1.5 billion worth of bitcoin big newsnews at the time, and helped BTC surge by more than 60% following the announcement. But the update that Tesla was liquidating its Cryptocurrency Assets has not had a corresponding negative effect on BTC price or, for that matter, market sentiment. In fact, BTC has been slightly up in the day since Tesla disclosed the sales.

 

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One might attribute that to Tesla’s statement on the BTC sale. During its recent quarterly earnings conference call, Musk emphasized that the sale “should not be taken as some verdict on bitcoin,” but was instead mostly a decision to free up U.S. dollars ahead of a probable economic downturn.

 

But as hard as it is to admit, most people don’t read past the headline “Tesla sold its bitcoin.” What does it say about BTC, Musk or Tesla that markets have shrugged that off?

 

Most apparently, Tesla’s initial announcement came during a period of rising hype, when a large number of new Cryptocurrency risk-takers were likely easily influenced by the moves of a big-name tech billionaire like Elon Musk.

 

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After the deflation of a huge cryptocurrency bubble and bitcoin’s price dropping by nearly 60%, remaining investors are more likely to be strongly dedicated to bitcoin’s fundamentals and less concerned with the opinion and choices of one rich guy.

 

 

It's also true that, despite this year’s slump in prices, bitcoin and Cryptocurrency in general are at a different place than they were 18 months ago. Though two years of cryptocurrency hype generated the usual surfeit of theft, scams and garbage, it has also rapidly advanced development, awareness, adoption, including El Salvador’s controversial but important bitcoin experiment. And although there are no guarantees, the Cryptocurrency Market now seems to have at least found a temporary bottom, so Tesla’s BTC sale news is fighting against an emerging bull narrative.

 

But another crucial factor is the change in Elon Musk and Tesla’s public reputation in the last 18 months since the big bitcoin buy – changes that have been generally for the worse.

 

Musk has had a reputation for trusting his impulse for years, and a self-destructive streak was evident at least as far back as 2018 – the year he called a rescue diver a “pedo guy” and accepted a big penalty from the Securities and Exchange Commission (SEC) over tweets about taking Tesla private “at $420 per share.”

 

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But back in 2018, Elon Musk was still possibly transitioning from Silicon Valley tech hero to global figure. Tesla’s stock price exploded in early 2020, and by January 2021 that upsurge had made him the wealthiest person in the world, at least on paper.

 

That has meant Elon Musk’s misadventures over the past 18 months have been even more extensively scrutinized than his series of tantrums in 2018. The list of public slipups is long, but standouts include allegedly sexually harassing a SpaceX employee and secretly fathering kids with an employee (of an entirely different company).

 

On the Cryptocurrency front, Elon Musk spent years tweeting about Dogecoin (DOGE), which may have been a joke from the beginning phase but wound up with a $285 million litigation against him when DOGE bubble crashed this year.

 

And the cherry on top, of course, has been his strangely half-hearted attempt to buy Twitter (TWTR), followed by attempts to back out under pitiably thin pretenses.

 

At the same time, those actually paying attention to Elon Musk’s businesses might have come across Tesla’s repeated failure to deliver on the promise of “full self-driving,” and its delay in the release of the much-hyped Cyber truck, even as legacy car manufacturer muscle in on Electric vehicles (EV) in a big way. Tesla stock has, much like the market, given back large portions of its 2020 profits.

 

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All in all, Elon Musk may still remain a bit of a halo in the eyes of Tesla investors and “green tech” fans. But to many others, he has become nothing but a clownishly hype-obsessed avatar of capitalist excess, unfathomable to the society that made him rich, and uncaring to the harm he inflicts on the little people beneath his command.

 

For cryptocurrency experts specifically, Elon Musk’s absurd and destructive shilling of DOGE has made it quite evident that he either doesn’t understand the features and use cases of bitcoin or at best, doesn’t care much at all.

 

Tesla’s BTC sale, for all the caveats about freeing up cash in hand, approves what some of us knew all along: Elon Musk isn’t someone you should look to for leadership on Cryptocurrency. He’s just a particularly noisy, impulsive and unreliable fan.