Crypto Altcoins Outperform as Tesla Sales Weigh on Bitcoin
Bitcoin fell for the first time in three sessions after Tesla disclosed that it sold about 75% of holdings of the cryptocurrency.
(Bloomberg) -- Smaller cryptocurrencies such as Ether and Avalanche were outperforming Bitcoin as Tesla Inc.’s discloser of recent sales weighed on the market bellwether.
Bitcoin was mostly little changed after dropping as much 3.9% to $22,348 earlier Thursday. Ether, the second largest digital currency by market value, gained as much as 3.2% to $1,569. Avalanche climbed as much as 6.4% to $25.43.
The broader crypto sector continues to benefit from an increase in risk appetite, with technology shares leading gains among US equities. Bitcoin had been correlated with the tech shares amid much of the recent drop in prices.
Tesla said Wednesday that it sold about 75% of Bitcoin during the second quarter because of concern about overall liquidity of the company given the Covid shutdowns in China. Tesla CEO Elon Musk, who has been as a major influencer in cryptocurrency, said the sales shouldn’t “be taken as some verdict on Bitcoin.”
Read: Tesla Sells Majority of Bitcoin After Turbulent Crypto Foray
Musk has expressed interest in Bitcoin and Dogecoin and at one point allowed customers to buy Tesla’s electric cars with the token. The company later suspended the Bitcoin payment option citing environmental concerns about cryptocurrency mining.
Tesla isn’t the only company that has adopted a Bitcoin strategy. Other companies to watch out for with significant Bitcoin holdings are MicroStrategy Inc. and Block Inc, lead by cryptocurrency advocates Michael Saylor and Jack Dorsey, respectively. MicroStrategy’s earnings will release Aug. 2, and Block on Aug. 4.
Bitcoin’s 50-day moving average which recently been a negative indicator for investors, despite a positive historical trend, has turned around, according to a July 21 note from Bespoke Investment Group, other similar moves have lead to large gains for Bitcoin, with notable exceptions.
“While short-term returns are generally good, a resumed long-term crypto bull market is hardly guaranteed based on the historical analogues,” the note read.
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