Tesla’s meteoric tread expires this month as experts begin to worry that the stock’s performance may begin to mimic bitcoin’s extreme volatility after the company unveiled a $ 1.5 billion investment in the world’s largest cryptocurrency earlier this month.
Tesla’s shares plunged more than 10% on Tuesday morning, pushing its losses since February 8 – when the company first revealed its $ 1.5 billion investment in bitcoin – to more than 25%.
The crippling blow to Tesla shares has wiped out about $ 215 billion in the company’s market capitalization, up from about $ 620 billion since the investment, when the company’s market capitalization was close to $ 844 billion.
The latest step comes when bitcoin prices refuel about 7% after Tesla’s billionaire CEO Elon Musk said over the weekend that cryptocurrency prices looked “a bit high”, said Oanda Senior Market Analyst Craig Erlam on Tuesday morning.
In a note to customers on Tuesday, Wedbush analyst Dan Ives said that “for both good and bad”, Tesla shares are now “strongly tied” to bitcoin prices – a development that is driving sales among prudent investors.
Although he is still bullish on Tesla’s stock, Ives is also losing recent losses to the company, stopping sales of its cheapest Model Y and ongoing price cuts that have led to demand from Wall Street analysts.
“Electric vehicle space is beginning to play out,” Ives said on Tuesday, noting that Tesla dominates the market, which is expected to grow to an estimated $ 5 trillion in the coming decade. “The market … will have many winners around the world – especially with a President Joe Biden – driven green tidal wave on the horizon in the US. But by weaving bitcoin into the mix, Tesla shares have now added volatility and driving force. the emotional debate around its name. “
Tesla shares increased by more than 740% in 2020. The share is now at its lowest level since then went into S&P 500 at the end of December.
“The case that has taken place since then [Musk’s tweet] shows how wild an instrument bitcoin is, how overbought it has become and how influential Tesla’s CEO is now in space, “Erlam said on Tuesday. I’m not sure any of that is good. “
$ 155 billion. That’s how much 49-year-old Musk is worth, according to Forbes. His net worth fell $ 12 billion on Tuesday after falling $ 12 billion on Monday.
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