Tesla Announces Massive Bitcoin Sale: What Does It Mean for the Market?
Over the week, we have seen similar actions from large BTC holders. Is there a bear market coming?
The cryptocurrency market was taken by surprise yesterday by the news that Elon Musk’s Tesla revealed to have sold 75% of its Bitcoins, about $936 million.
The impact was immediate: after some highs that mainly encouraged small investors, Bitcoin today suffered a 4.5% retreat, and we can already observe more conservative movements by the owners of the largest BTC wallets, including whales that continue to draw a lot of attention. . What else can we look forward to next?
Elon liquidated, now what?
According to Musk, the reason his company carried out this massive Bitcoin sale was uncertainty about the lockdown applied in China to fight COVID-19.
Converting most of his BTC into fiat currencies was the solution the billionaire found to optimize his cash balance and ensure more liquidity for Tesla. He further mentioned that his company’s action should not be taken as a verdict for Bitcoin, and that Tesla could definitely return to buying BTC in the future.
This type of statement usually reinforces that this is not the time to get rid of all the Bitcoins in your wallet once and for all. On the other hand, if there is one lesson to be learned from the latest currency movements, it is that we should not be overly optimistic.
Just this week, I commented that even with the highs of the main cryptocurrencies, such as Bitcoin and Ethereum, the moment was cautious and we were probably just experiencing a quick breather, with the risk of a possible bull trap.
With the sale carried out by Tesla and other recent news that affect the market in a significant way, such as the 0.5% increase in the interest rate applied by the European Central Bank, we are most likely seeing a continuation of the bear market, a moment that is not prone to for further Bitcoin rallies.
Tesla was one of the first to get rid of much of its Bitcoins, will we see annihilations of large BTC wallets? Who will be the next player to make this move?
What do you think will happen to Bitcoin? Come to Foxbit’s Discord to chat about the future of the market and more with our community of traders!