Bitcoin kicked off Thursday’s trading session on a backfoot amid weak stocks and reports showing that Tesla Inc., a leading car manufacturer, sold off most of its crypto holdings during the second quarter. Asian stocks have also edged lower as investors considered the latest corporate earnings report and the geopolitical risk in Europe.
Despite enjoying a good run in the last couple of days, the cryptocurrency market is taking a breather as investors remained cautious following a rally spurred by tightening monetary policy and increasing defaults within the industry.
Bitcoin blasted through a three-session rising streak on Wednesday, rising to as high as $23,200, but has now slightly retreated. On Thursday, the leading cryptocurrency by market cap dipped by 1.7% and is now trading around $23,052.
Tesla’s reason for selling Bitcoin holding
Elsewhere, Tesla reported that Bitcoin’s poor performance affected the company’s second-quarter earnings, forcing it to sell off 75% of its bitcoin holdings.
According to Elon Huang, chairman and founder of MainNet Capital, there is no strong reason for the crypto market to maintain the recent rally. He added that weak Asian stocks and Tesla selling off a large part of its crypto holding have contributed to the new round of sell-off being experienced in the crypto market. The fund manager expects Bitcoin to find support around the $19,000 level.
In its latest earnings report, Tesla stated that selling its Bitcoin holdings added $936 million of cash to its balance sheet. While the leading automaker has yet to provide the impairment size, Bloomberg Intelligence stated that the quarterly result could include Bitcoin-related charges of nearly $740 million.
Over the last couple of years, Tesla CEO and the world’s most influential man, Elon Musk, openly supported Bitcoin and Dogecoin and even laid the framework for his company to accept car payments in Bitcoin and Dogecoin. But after a few months, the company rescinded its decision and suspended Bitcoin payment, citing the environmental concerns around Bitcoin mining.
While Bitcoin retreated from its latest rally, other digital assets are also taking a breather. Ethereum, the second largest cryptocurrency by market cap, is down nearly 4% in the last 24 hours and now trading at $1,491.