Key Takeaways
- Bitcoin continues to higher grounds, rises nearly 15% in the week
- Tesla’s Bitcoin sale could have partly contributed to today’s move higher
Bitcoin Climbs to a New Weekly High
On Tuesday, Bitcoin traders and investors managed to produce a new weekly high as the price got boosted to levels around $55,000 per coin. For a second consecutive day, the digital asset has been getting strong support from market participants. Today’s upswing is a continuation of yesterday’s solid jump that took Bitcoin higher by over 12%. On Tuesday, the crypto token is up another 2.5% with a session high of $54,990.
So far this week, the world’s largest coin has appreciated nearly 15% as increased buying lifted the asset’s price from the 7-week low reached yesterday when Bitcoin dipped to $47,000. The overall market capitalization of Bitcoin has grown to over $1tn again, after it dipped below $900bn on Monday. Even though the value of the number one coin increases, its market share remains below 50%, indicating other cryptocurrencies are also growing in size. The current market cap of the whole crypto space now sits at $2.04tn, posting an increase of 18% compared with a day ago.
Meanwhile, partly responsible for the continued rally today could be Tesla’s earnings report. The EV maker disclosed in its quarterly financial results it had sold Bitcoin worth $272mn during the first quarter. The stake is equal to 10% of Tesla’s Bitcoin holdings. The sale resulted in a “$101 million positive impact”, according to the cash flow statement.
A Worthy Long-term Investment
During the earnings call with investors, Tesla’s CFO Zach Kirkhorn mentioned that “Tesla is watching how the market develops and listening to what our customers are saying, but thinking about it from a corporate treasury perspective, we’ve been quite pleased with how much liquidity there is in the Bitcoin market.”
He went further to say Tesla “believes, long term, in the value of Bitcoin, so it is our intent to hold what we have long-term and continue to accumulate Bitcoin from transactions from our customers as they purchase vehicles.”
The news that Tesla sold part of its Bitcoin holdings raised concerns over the company’s intentions with cryptocurrency. In a response to a tweet saying Elon Musk bought Bitcoin to inflate its price and then “dump it”, the Tesla chief stated he had not sold any of his Bitcoin. “Tesla sold 10% of its holdings essentially to prove liquidity of Bitcoin as an alternative to holding cash on balance sheet,” he added.
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