According to the second quarter filings of Tesla Inc., the company sold almost $1 million worth of Bitcoin from its overall holdings.
The crypto community has had mixed reactions to the sale and one such reaction has also come from the chief executive of Binance, Changpeng Zhao.
The chief executive of the biggest crypto exchange in terms of trading volume has dismissed the sale entirely and said that it did not have any impact on the market.
Zhao said that just because Elon Musk’s Tesla had decided to sell off 75% of their bitcoin holdings does not make much of a difference.
He stated that this would not harm the fundamentals of Bitcoin and added that he still had most of the coins that he purchased when he ventured into the crypto market.
In the second quarter earnings call of the electric car manufacturer, Musk shed some light on why Tesla had taken the decision to sell off most of its Bitcoin holdings.
He stated that the newly opened factories of the company in the US and Germany required cash and its liquidity had been affected because of the COVID-19 lockdowns in China.
Therefore, the sale of bitcoins provided the company with the cash flow it needed for its factories.
Tesla had one of the largest corporate Bitcoin holdings. Early last year, the company had announced that it would start making Bitcoin purchases and in March, it had also begun accepting payments in Bitcoin.
However, it eventually put a stop to accepting Bitcoin payments and cited environmental concerns as its reason for doing so.
Binance’s CEO had confirmed in an interview that he had bought bitcoin and was holding onto his coins. He said that he still possessed almost all of the coins that he had originally purchased before he had entered the market.
He also disclosed that he had spent less than 1% of the bitcoins he had purchased. Zhao had also revealed in June that he did not have any fiat currencies in his possession.
Instead, he opted to keep all his holdings in the form of cryptocurrencies and said that the only financial asset he uses for making his life purchases in digital currencies.
He also added that he did not need to sell his crypto assets in order to cover his expenses.
No association with failed companies
Zhao also pointed out that his company did not have a lot of exposure to the companies that had recently failed in the crypto market.
He was talking about crypto lending company Celsius Network, the crypto hedge fund Three Arrows Capital, and Voyager Digital.
The CEO also clarified that Binance was not a borrower or lender in the crypto space. He stated that his company preferred to keep its crypto operations simple.
Therefore, they are only focused on crypto trading and are not associated with the crypto lending business in any way, so they haven’t had any exposure.