Tesla’s shares fell in the bear market, which is more than 20% less than the recent high, and some analysts believe that the company’s ties with bitcoin are to blame, as the currency takes a hit after more cautious comments by US Treasury Secretary Yellen.
The stock, which fell about 21% from a closing level of $ 883.09 on January 26, withdrew along with the digital currency. Bitcoin has slipped about 17% since Tuesday and fell to $ 48,170 after reaching a high of $ 58,332, according to Coindesk.
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Courtesy: Dow Jones Market Data Group
Electricity producers ’investment in the $ 1.5 billion currency to diversify the cash fund, as described in a report to the Securities and Exchange Commission last month, could be a double-edged sword.
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“Investors are starting to tie Bitcoin and Tesla to the hook. Although Tesla on paper earned approximately $ 1 billion in Bitcoin in a month that surpassed all of its EV profits by 2020, the recent 48-hour Bitcoin sell-off and added volatility led some investors to exit the name in in the short term, “wrote analyst Dan Ives of Wedbush, who also noted that he believed the move was” long-term strategic. ” Ives rates the shares as a retention, but sees further gains. “We maintain a target price of $ 950 and a bull case of $ 1,250,” it added.
Bitcoin volatility this week also came when Yellen repeated cautious comments when asked about the future of the digital currency.
“Bitcoin and I’ve said it before – it’s widely used as a transaction mechanism to the extent that it’s used, I’m afraid it’s often for illegal finances. It’s an extremely inefficient way to conduct transactions. And the amount of energy used to process them are transactions. “But it’s a very speculative asset, and you know, I think people should beware. It can be extremely volatile and I’m worried about the potential losses that investors in it could suffer,” Yellen said in an interview with the New York Times DealBook. DC policy project on Monday.
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Yellena’s remarks followed a clarification by Tesla CEO Elon Musk himself last week about what was behind his company’s stake in digital assets.
“When fiat currency has a negative real interest, only a fool wouldn’t look anywhere else,” Musk tweeted last week.