Cryptocurrency prices, including Bitcoin, the most popular of the lot, have been highly volatile in recent months due to conflicting regulatory signals and rising interest rates.
Despite the massive sale of digital tokens, the CEO of Tesla (NASDAQ:TSLA) º is among those who are still bullish on digital currencies. As such, the recently discounted $1 trillion company is caught in the crosshairs of moves in the cryptocurrency market.
Bitcoin price crash
After hitting an all-time high of $67.5,000 in November, Bitcoin price is now hovering around $40,000 year-to-date. The crash was partly due to remarks by the US Federal Reserve on launching its own digital currency similar to Chinese e-Renminbi and US President Joe BidenThe recent order directing government agencies to coordinate on a regulatory framework for digital currencies.
While the regulatory forces mentioned above have helped suppress any bullishness in digital assets, the biggest contributor to Bitcoin’s price crash is the flip-flop that Musk, and by association Tesla, has pulled off in support of Bitcoin. . Somehow, these cryptocurrency crosshairs are attached to the rifle sometimes wielded by Musk and Tesla.
Tesla’s $1.5 billion bitcoin stash
Last year, Tesla revealed that it had invested a total of $1.5 billion in Bitcoin and hinted that he might acquire and hold digital assets “from time to time or for the long term”. Since that announcement in February 2021, the company has not made any additional Bitcoin purchases.
Tesla revealed in his annual report 2021 that it still held approximately $1.26 billion in digital assets and had suffered impairments of $101 million on its digital assets.
At the same time, the electric vehicle leader also reiterated its confidence in the long-term potential of digital assets both as an investment and as a liquid alternative to cash. However, the automaker warned, in an ambiguous statement, that it could scale up or down its digital assets depending on its business needs and view of market conditions. However, knowing that Tesla depends on Musk as “product architect and social media manager”, as quoted by Bloombergthe company’s stance on digital currency may be much more aligned with its personal views than the above statement suggests.
More than a month after the company’s disclosure, Musk on Twitter said he still owns and “wouldn’t sell” his own personal holdings of Bitcoin, Ethereum, or Dodge, pointing out that “it’s usually better to own physical things like a house or shares in companies that you think , make good products, only dollars when inflation is high.”0