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Elon Musk, CEO of Tesla Inc. (Tesla shares – TSLA ticker) and SpaceX have long supported Bitcoin (BTC) and meme coins, Dogecoin (DOGE) and Shiba Inu Coin (SHIB).
References to cryptocurrencies appear frequently on Musk, Tesla and SpaceX’s Twitter account in particular driving the price movements of BTC, DOGE and SHIB.
Eventually, supportive tweets, Tesla and SpaceX announcements, and interviews raised doubts and skepticism that Musk’s remarks sounded like a manipulation.
More importantly, the latest news from the company indicates a shift in sentiment towards cryptocurrencies, or perhaps a show of strength in the cryptocurrency market.
Tesla Inc.’s Bitcoin holdings were transferred without notice
It was announced Wednesday that Tesla had sold 75% of its cryptocurrency holdings. According to Reuters:
“As the reason for the sale, Elon Musk cited concerns about the current liquidity of his business.”
Overall, Tesla sold $ 936 million worth of BTC in the second quarter, a year after buying $ 1.5 billion near the top of the market.
Regarding liquidity concerns, Elon Musk said:
It was important for us to tell them more about our financial situation. We are certainly willing to share our bitcoin holdings in the future, so this shouldn’t be interpreted as a judgment on bitcoin. We are only concerned about the overall liquidity of the business.
However, Musk confirmed that the company has not sold its stake in Dogecoin (DOGE).
On February 8, 2021, it was announced that Tesla had bought Bitcoin for $ 1.5 billion. However, unlike other long-term buyers of BTC, aka Bitcoin Whales, Tesla flooded the market with a significant share of investments in 2021, contributing to the collapse of BTC and the cryptocurrency market.
Although Musk pointed out that DOGE did not meet the same fate, DOGE and SHIB now face similar prospects. Neither DOGE nor SHIB have demonstrated the price stability which justifies special treatment.
The musky effect was evident and the cryptocurrency market reacted to the news.
Bitcoin fell 5.45% from its daily value of $ 24,276 before finding support and ending the day 0.76% lower. On the contrary, DOGE reacted positively, rising by 1.59% and bucking the market trend.
The reference to the DOGE holding could be a place of price manipulation. In June 2022, Musk spoke on Bloomberg TV and declared his support for DOGE. Musk expressed support for him in response to requests from DOGE investors asking Musk to reiterate his support for meme coins.
During the interview, Musk also said that the amount of BTC he owns is insignificant compared to the cash shares provided to Tesla and SpaceX.
Additionally, Musk expressed his support despite an investor filing a $ 258 billion lawsuit against Musk, SpaceX and Tesla Inc. for claiming that “Dogecoin is a legitimate investment even if it has no value.”
Elon Musk and the great failures before Tesla and SpaceX
After an uncertain start, Tesla Inc. has established itself as a profitable automaker with revenues of over $ 18 billion. While SpaceX is on solid ground, Musk has had a rocky past, to say the least. A series of failures marked his biography.
Musk’s most famous and memorable moments include a failed job offer at Netscape, his departure from Zip2 as CEO, his departure from PayPal, and a series of failed rocket launches.
For investors looking to follow in Musk’s footsteps, the decision to sell Tesla’s 75% stake in BTC is a wake-up call for owners of DOGE and SHIB.
In June, Elon Musk said BTC stock was negligible compared to cash. Dogecoin could meet a similar fate if Musk transfers DOGE stock. Musk may even cut DOGE payments for SpaceX and Tesla transportation.
Dogecoin had its big moment on January 29, 2021, when DOGE saw a 166% increase on news of Elon Musk’s purchase of DOGE. Musk did not provide details on the purchase of DOGA. Yet DOGE is 0.7398. On August 5, 2021, it reached an all-time high of 0.0491. on June 18, the US dollar fell to its lowest level for the current year 2022.
Shoppers rushing to August 2021 will be unhappy, despite Musk’s efforts to push back DOGE multiple times. If we look at the DOGE daily price chart, Musk’s price jumps are noticeable. However, they have not reversed the downward trend since August 2021.
In a June interview with Bloomberg TV, Elon Musk made a comment that should resonate with cryptocurrency investors.
“I never said people should invest in cryptocurrencies.”