In February, Elon Musk made headlines on the announcement of Tesla purchasing Bitcoin. The initial investment into Bitcoin occurred when the price per coin was roughly $38,000.
The investment helped encourage enthusiasts up the market, many saw this as the beginning of institutions using Bitcoin for their company’s holdings.
In May, Musk announced that Tesla would be taking profits from their crypto stock. The company sold 10% (around 46,000 Bitcoin) when the price was roughly $50,000. Tesla’s quarterly reports showed a $128m profit on the sale of these Bitcoins.
Monitoring resources showed Tesla owning an estimated 43,200 Bitcoin. The strategy of using cash reserves has been very successful for the company.
Tesla is not the only business to adopt the strategy of purchasing Bitcoin with its company holdings. MicroStrategy and Square are both organizations that have leveraged cash reserves into Bitcoin and reaped tremendous profits.
With the market looking strong, the chance of other companies following suit is rising. By looking at business leaders who are already interested in cryptocurrency, Crypto enthusiasts are speculating on which company could potentially be next.
It is not sure when Tesla will take another round of profits from their holdings. Should they choose to release some of their Bitcoin it could potentially put negative pressure on the market. The company would not benefit from diminishing the market; as Musk is very much still bullish towards the digital currency.
The adoption of Bitcoin by new companies would further improve its validity. With discussion around digital currency regulation in the US, an increase in large businesses holding Bitcoin (and other cryptocurrencies) could help promote more positive legislation towards the industry.
Cryptocurrency looks to finish the year strong as the total market cap approaches a new all-time high. The highest market cap of the sector was $2.55tn, with the current market cap at $2.52tn. Many are speculating that this push could spark great things for Bitcoin and other cryptocurrencies
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