Tesla, led by Elon Musk, confirmed that it bought about $ 1.5 billion in Bitcoin in January and plans to start accepting it as a payment in the future.
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Tesla According to Wedbush analyst Daniel Ives, stock prices are directly linked to Bitcoin prices after Elon Musk’s company invested $ 1.5 billion in volatile cryptocurrencies.
“Musk is now tied to the story of Bitcoin in the street eye. Tesla owned Digital Gold and made a billion paper profits in the first month, but as you can see this week, additional There are risks, “Ives told CNBC in an email on Tuesday.
“When Tesla jumps into the deepest part of the pool with Bitcoin, Musk runs the risk that this sideshow could obscure the basic EV (electric vehicle) vision for investors in the short term.” He added.
Despite some concerns, Ives still believes that Bitcoin is “a smart move at the right time for Tesla.”
Ives Estimated on monday Tesla has already earned over $ 1 billion from cryptocurrency investments.
“On the downside, playing with firecrackers adds risk and volatility to Tesla’s story,” says Ives.
Both Tesla and Bitcoin suffered significant losses this week.
Tesla shares fell more than 11% when the market opened on Tuesday. This is the day after the stock lost the most in a few months. Tesla shares fell 8.55% on Monday. This is because investors who are betting on the revival of the pandemic have rotated from Big Tech and accumulated in circulating stocks. It was the biggest drop since Tesla closed 10.34% on September 23, 2020.
Bitcoin prices fell further on Tuesday after US Treasury Secretary Janet Yellen. Issued a warning About cryptocurrency.
On Monday, Yellen called Bitcoin “a very inefficient way to trade” and warned of its use in illegal activities. She also warned about the environmental impact of Bitcoin. The surge in tokens reminded critics of the high level of electricity needed to produce new coins.
According to Coin Metrics data, the world’s most valuable digital coin has plummeted 16% in the last 24 hours, below $ 50,000 and to $ 45,389 at 4:10 EST.
Tesla announced at Securities and Exchange Commission Submitted earlier this month Buy Bitcoin worth $ 1.5 billion and start accepting Bitcoin as a payment method for your product.
Musk has been tweeting about cryptocurrency on and off since then, warning in several corners. He also tweeted about other coins like Ethereum and Doge.
Billionaire changed Twitter’s biography to BTC last month. Soar 20%And over the weekend, he said Bitcoin and Ethereum prices seemed “high”, causing a sharp fall.
M & G fund manager Eric Lonergan said Tuesday that Mask’s actions on Twitter were a source of concern.
“If your Twitter feed is non-stop about your assets, it’s a big warning signal,” Lonergan told CNBC Squawk Box Europe. “In the world of social media stories, you have to be very careful. If your CEO’s personality is ten times as big as the car you’re making, you need to bring something like this. Yes … you know … this is a very, very, very dangerous area from an investment perspective. “
Despite the recent decline, Wedbush is bullish on Tesla, which is currently valued at around $ 780 billion.
“Tesla believes it will reach a trillion market capitalization in the coming months through the growth of EVs, not Bitcoin,” Ives said.
“We believe that EV adoption is skyrocketing globally, especially in China, which is why Tesla is so well suited to take advantage of this $ 5 trillion market over the next decade. “Tells us,” he added. “But Bitcoin is currently obscuring Tesla’s broader growth story in 2021, and I believe this will soon pass.”
- Additional report by Ryan Browne and Jessica Bursztynsky.
Analysts say Tesla and Bitcoin values are currently linked
Source link Analysts say Tesla and Bitcoin values are currently linked