The current crypto market is no doubt struggling with a wide variety of macroeconomic factors. And so on with the Altcoin markets, which face the same crisis. The most traded cryptocurrencies noted the drop in its current prices. Moreover, the earnings report of Tesla seems to be one of the important reasons for the price drop of the altcoin market.
Tesla’s Latest Earning Report
Tesla reported on October 19, 2022 in its latest earning report that Electric car maker, Tesla will not sell any of its bitcoin holdings and not purchase any additional bitcoin in the third quarter. After the following report, the stock of Tesla plummeted. While, in the after-market, $TSLA is down by 6.25%.
In the second quarter earning report, Tesla CEO, Elon Musk said that the sale was made because of “the uncertainty of the COVID lockdowns in China,” but also mentioned that Tesla is open to boosting its bitcoin exposure in the future and that the sale “should not be taken as some verdict on bitcoin.” The price of bitcoin fell about 1.7% on the initial news at the time, but soon regained its losses after Musk’s remarks on the call.
Additionally, Tesla CEO, Elon Musk, gave the information to crypto investors that despite strong demand in the fourth quarter, the company will miss its vehicle delivery target in 2023.
However, it is expected that Tesla will earn over $22 Billion in the third quarter. But as the company revealed that its third-quarter revenue was noted at $21.45 Billion. And its gross automotive margin also missed the estimates.
It can be seen that the crypto market is strongly correlated to the wider general market. And in particular, it shows a strong bond between technology stocks and the tech-oriented NASDAQ. As leading firms miss earnings estimates, the stock market plummets. As a result, the crypto market is also struggling too.
In addition, the earnings of Tesla tend to reflect fears of a slowdown in the economy and a potential recession. Whereas, the World Bank considers that the economy will face a recession in 2023. Major personalities such as Amazon Founder, Jeff Bezos further thinks that a recession is inevitable.
In spite of the missed earnings report, Tesla CEO, Elon Musk looks bullish on Tesla. He made a strong prediction that Tesla can be more valuable than Apple and Saudi Aramco combinely. It must be noted that both Apple and Aramco are currently valued over $2 Trillion. Although, Tesla is worth a little over $700 Billion. And the claim by Musk indicates that he sees the path forward for the company.
For the crypto market, the earnings report brought out that the digital asset holdings remain unchanged. That means that the company is holding the rest of the Bitcoin.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/10/20/elon-musks-market-outlook-for-altcoin/