Is The Price Of Tesla Now Tied To The Value Of Bitcoin?
Last Updated on 25 February 2021 by CryptoTips.eu
A few years ago, when Tesla stock was trading for much lower prices than it is today, CEO Elon Musk got himself in hot water for comparing short sellers to Nazis. In fact, he even launched a video showing the famous Hitler rant from the movie Der Untergang in which German generals are discussing hedge funds out to destroy Tesla.
It was entitled A Tesla Short Seller Gets Q2 Results.
The stage was set for a love-hate relationship between Wall Street and Musk.
This time round, it sounds like some in Wall Street classic finance are not too happy about Elon’s decision to tie the fate of his company to that of Bitcoin.
On CNBC yesterday, analyst Dan Ives was asked whether the price of Bitcoin and the price of Tesla are now linked to each other.
Multiple attacks
Even though the 1.5 billion dollar direct investment by Tesla is less than 10% of it’s overall cash stockpile, some in Wall Street apparently feel that Elon in this manner is showing his hand too much as to the love of all things modern and risky in their view.
It is therefore claimed that several investors in Tesla have since headed for the exit.
Ives said:
That added risk and volatility definitely sent some investors that we’ve talked to, to the exit. I still think only a near term issue, but ultimately this is something right now, tied into some extent with Bitcoin.
Is #Bitcoin Elon Musk's friend or foe?
— Power Lunch (@PowerLunch) February 24, 2021
A top analyst explains why the the price of @Tesla is tied to $BTC.$TSLA pic.twitter.com/i2Ypf3HHtb
It is remarkable to see that just as Bitcoin now gets attacked from multiple angles (US Treasury Secretary Janet Yellen, ECB President Christine Lagarde, New York economist Nouriel Roubini), the same seems to be happening to Tesla in this instant.
Of course, both investments were two of the clear winners of 2020 and are continuing their run this year.
Chinese quality issues
The Wall Street Journal, another behemoth and defender of classic finance, also released a video yesterday which seemed to indicate that Tesla’s move into Bitcoin was due to get the attention away from it’s quality issues it recently found when producing in China.
The fact that Tesla made an entry into China without using direct help from a local supplier has not gone down too well with the Chinese, and the stirring Chinese nationalism witnessed in recent years (the biggest grossing Chinese movie ever is Wolf Warrior 2 which is highly patriotic) resulted in an overhyped social media frenzy surrounding a single burning Tesla Model 3 in an underground parking garage.
The fact that a Chinese producer is the second biggest EV (Electric Vehicle) producer on the market, should come as no surprise. In fact, the top Chinese automaker SAIC Motor, has now even launched a $4,500 car, hoping to price Tesla out of the Asian market.
