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The flagship crypto asset was performing quite well and surged above the $20k price mark yesterday.
This was huge news for the crypto community, especially the investors and traders rooting for the crypto king.
This surge in price was noted for BTC after weeks of struggling. However, it seems that the bullish run was short-lived as the price of Bitcoin has dropped once again.
Even though the price has not plunged as extremely as it did before, some enthusiasts are concerned. Experts are, however, unfazed as the drop was caused due to Tesla’s decision to sell 75% of its Bitcoin holdings.
The reason why Tesla decided to do so and its effects on BTC’s price are discussed below in detail.
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Why Tesla Sold Part of its Bitcoin Holdings?
Tesla is second to MicroStrategy in terms of public companies with most Bitcoin holdings.
The electric automotive manufacturer revealed that it sold 75% of its Bitcoin holdings in Q2 of 2022 and added $936 million in fiat to its balance sheet.
During a conference call, CEO Elon Musk stated:
“The reason we sold a bunch of our Bitcoin holdings was that we were uncertain as to when the Covid lockdowns in China would alleviate. So it was important for us to maximize our cash position.”
He added:
“We are certainly open to increasing our Bitcoin holdings in the future.”
Musk also stated that the sale “should not be taken as a verdict on Bitcoin,” however, it certainly has affected the price of the flagship digital asset.
Bitcoin dropped below $23k after the announcement was made by Tesla. It saw a drop of 3.12% in the last 24 hours and is now trading at $22,889 (at the time of writing).
Crypto experts are not surprised by Tesla’s move and have stated that many companies follow this strategy to improve their cash flow during economic slowdowns and possible recessions. Therefore, it is unlikely to further affect BTC. Another expert also pointed out that Tesla has not sold off all its Bitcoin holdings, which is also a positive indication for BTC enthusiasts.
Anyone interested in buying the crypto king should begin by choosing one of the largest Bitcoin exchanges.
What to Know as a New Investor?
There are a few crucial aspects you need to be familiar with before you begin investing in BTC or any other digital asset. Buying a cryptocurrency can be complicated and sometimes a little risky if the novice parties do not have any relevant information or prior experience.
Therefore, it is useful and essential for all new investors to first know some tips to get started in crypto. Such tips can help beginners in avoiding risks and obstacles and have good crypto investing experience.
Some of the helpful tips for new investors are mentioned below.
- Choose the lowest fees Bitcoin exchange that suits your needs the most.
- Keep a track of the price movement of the crypto asset you want to buy.
- Know the right time to invest.
- Start by investing a small amount.
If you want to purchase Bitcoin for the first time then you can click on SwissBorg or Kraken (U.S. citizens).
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