When Tesla announced that it has sold 75% of its digital assets, many expected the crypto market especially Bitcoin to witness heat from investors. However, Bitcoin has managed to float and shrug off the impact. Tesla sold its Bitcoin holding to drive its cash reserves.
Tesla had invested $1.5 billion in Bitcoin in the first quarter of 2021. In its SEC filing on July 25, Tesla said, during the three and six months ended June 30, 2022 period, it recorded an impairment loss of $170 million as well as realized gains of $64 million in connection with converting its holdings of digital assets into fiat currency. In the first half of 2022, Tesla also realized gains of $128 million in connection with converting our holdings of digital assets into fiat currency, further, the company recorded $23 million and $50 million, respectively, of impairment losses on bitcoin. Also, the company recorded other expenses of $36 million during the three months ended June 30, 2022, related to the recent employee terminations.
As of June 30, 2022, Tesla has converted approximately 75% of its purchases into fiat currency. It now has net cash inflows related to digital assets aggregating to $936 million in the six months ended June 30, 2022, from sales of digital assets. That said, the company's fair market value of remaining digital assets held as of June 30, 2022, is to the tune of $222 million.
As per reports, Musk has stated that the latest sale of Tesla in Bitcoin should not be seen as a final verdict on the cryptocurrency. He cited the uncertain Covid situation in China as the main reason to boost cash reserves and book gains in Bitcoin. However, the CEO of Tesla has hinted for increasing their Bitcoin holding in the future. The billionaire also revealed that the company has not sold any Dogecoin.
On Thursday, Bitcoin is trading at $23,599.39 up by 9.91% in the 24 hours, as per CoinMarketCap data. While its counterpart Ethereum climbs 14.95% to $1,709.18. On the other hand, Dogecoin is trading at $0.06799 up by 8.16%.
In a week, Bitcoin's gain is nearly 5%, while Dogecoin is down nearly 1%.
As per CoinDesk data, Dogecoin's monthly drop is around 4%, while half-yearly, the token has contracted about 52.5%. Year-to-date, Dogecoin has slumped by over 61%, in a year, it has plummetted by nearly 68%.
On the contrary, on CoinDesk, Bitcoin has risen by nearly 12% in a month. However, Bitcoin's half-yearly drop is around 38%, while year-to-date, the leader has slipped nearly 51%. In a year, Bitcoin's dive is around 42%.
Bitcoin has been recovering faster than Dogecoin from the sharp volatile market conditions that began since May.
Created by Billy Markus from Portland, Oregon, and Jackson Palmer from Sydney, Australia, Dogecoin (DOGE) is based on a popular internet meme 'doge', and is an open-source digital currency. Since it has a dog meme, Dogecoin's founders believe the coin is a fun, light-hearted cryptocurrency and has the potential to attract beyond the core Bitcoin audience. Unlike Bitcoin, Dogecoin has a block time of 1 minute and its total supply is uncapped. That means, there are no limitations on the number of mining of Doge. An investor can even mine Doge either individually or by joining a mining pool. Bitcoin has a mining limit of 21 million.
Trading in Bitcoin began in 2009 without any source of its management or owner. No one up to this date is aware of who invented this digital coin, however, many speculations and names have popped up. Bitcoin gained popularity in early 2017, and it became the first-ever cryptocurrency to come into actual use. Bitcoin is decentralized and easily available.
Should you invest in Bitcoin or Dogecoin?
Dileep Seinberg, Founder & CEO, MuffinPay, Bill Payment & Utility Crypto said, "The crypto market is facing a tough time in terms of price action. The aggression of the US Fed's rate hike and rising inflation will decide the movement of the market in the near term. As far as Bitcoin is concerned, it scaled the $23,000 mark in the previous week but is now close to $21,000. If it breaches this mark substantially, we may see $17,000, which were its previous psychological lows."
"On the contrary, when it comes to Dogecoin, it has seen more acceptance of late. Even the Whale activity around Dogecoin has increased dramatically, spiking. But the impact of such occasions and Musk's push is not long-lived as it lacks a substantial use case. We would suggest investors to stay cautious and allocate only a small amount in the token," Seinberg added.
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