Tesla shares have fallen in a bear market, more than 20% since the recent high, with some analysts suggesting the company’s ties to bitcoin are to blame, as the coin takes a beating following more cautious comments from the company. US Secretary of the Treasury Yellen.
The stock, which is down about 21% from its closing high of $ 883.09 on January 26, has pulled back along with the digital currency. Bitcoin, as of Tuesday, has slid around 17% falling to $ 48,170 after hitting its all-time high of $ 58,332, as tracked by Coindesk.
ELON MUSK EXPLAINS TESLA’S $ 1.5B BITCOIN PURCHASE
Courtesy: Dow Jones Market Data Group
The electric vehicle maker’s $ 1.5 billion investment in the coin to diversify its cash holdings, as outlined in a filing with the Securities and Exchange Commission last month, can be a double-edged sword.
TESLA BUYS $ 1.5B IN BITCOIN, WILL BEGIN TO ACCEPT FOR CARS
Investors are starting to link Bitcoin and Tesla at the hip. While Tesla on paper made roughly $ 1 billion worth of Bitcoin in a month that surpassed all of its 2020 EV earnings, the recent 48-hour selloff in Bitcoin and added volatility have led some investors to exit this name. in the short term, “wrote Wedbush analyst Dan Ives, who also noted that he believes the move was” strategic for the long term. “Ives rates the stock as a hold, but sees more gains.” We maintain our price target of $ 950 and $ 1250 bullish “additional.
The volatility in bitcoin this week also came as Yellen reiterated cautious comments when asked about the future of a digital currency.
“Bitcoin and I have said it before, it is widely used as a transaction mechanism to the extent that it is used, I am afraid it is often for illicit financing. It is an extremely inefficient way to transact. The transactions are amazing. But it is. a highly speculative asset, and you know, I think people should be careful. It can be extremely volatile and I’m concerned about the potential losses investors may suffer, “Yellen said during an interview in the New York Times DealBook DC Policy Project on Monday. .
THE MARKET VALUE OF BITCOIN EXCEEDS $ 1 TRILLION FOR THE FIRST TIME
Yellen’s comments followed a clarification from Tesla CEO Elon Musk himself last week as to what was behind his company’s stake in the digital asset.
“When fiat currency has negative real interest, only a fool would not look elsewhere,” Musk tweeted last week.