The price of Bitcoin and Tesla shares have been in the spotlight recently, leading some retail investors to question whether there is any common ground between the two assets. As Bitcoin (BTC) continues to hover around the $12,000 mark (as of release), in doing so, the largest currency by market capitalization is reaching annual highs not seen since June 2019.
Tesla shares have also set a number of benchmarks. On August 20, Tesla’s stock price reached an all-time high, jumping more than 45% in 10 days to close above $2,000 per share.
In addition, data suggests that Bitcoin was the most viewed asset after Tesla’s U.S. stock last month.
Is Bitcoin behaving like a technology stock?
The growing interest in Bitcoin and Tesla makes some wonder if BTC is behaving more like a technology stock. Findings from London-based digital asset management firm CoinShares indicate that in its growth phase, Bitcoin is in fact behaving like a technology stock:
„Bitcoin’s risk profile is quite similar to that of a technology action: If it reaches its potential, the value could be immense, but at the same time, there is a non-zero chance that it will fail completely.
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While this may seem to be the case, Phil Bonello, research director at Grayscale Investments, told Cointelegraph that it’s not fair to look at the returns when drawing conclusions between Bitcoin and Tesla, with BTC increasing by approximately 63% per year to date and TSLA increasing by 365%:
„Most risky assets have correlated with each other because they have all depended on the strength or weakness of the same denominator: the US dollar. In addition, when assets are sold aggressively as they were in March, the correlation approaches 1 as they all need liquidity“.
Bonello’s point is verified by Tesla’s stock which fell to a low of $361 on March 18. Bitcoin also hit a low of nearly $3,800 in March. Bonello also commented that while he doesn’t look closely at Tesla’s details, there is currently a secular bull market. „I tend to believe that we are in a secular bull market driven by monetary and fiscal stimulus,“ he said.
Echoing Bonello, Natalia Karayaneva, an advisor to Arrington XRP Capital and CEO of Propy, a blockchain-based real estate platform, told Cointelegraph that new bubbles are emerging in the stock market and Bitcoin:
„Instead of buying tangible consumer goods, people are investing in these assets as a way of not having fiat currency. Similarly, institutional investors are investing in everything related to digital assets.
What are the similarities between Bitcoin and Tesla?
Market value aside, it’s interesting to consider the inherent similarities between Bitcoin and Tesla. According to Bonello, what Bitcoin and Tesla have in common is the potential for exponential growth, which makes them especially volatile and reflective.
This point also applies to most cryptomontages, not just Bitcoin. Mati Greenspan, a cryptomoney market analyst and founder of Quantum Economics, told Cointelegraph that he had been tracking a correlation between TSLA and the Chainlink LINK token, which is now the fifth largest currency in the world by market value. Greenspan’s findings highlight the volatility of both asset classes.
TradingView confirms it: people love Bitcoin and Tesla
Tesla stock in comparison to LINK token
Millennial retail investors seem to be the most interested in volatile Etoro assets such as Tesla and cryptom currencies. In fact, recent findings prove this to be true, as CNBC noted in February that Tesla was the most widely held stock in the personal finance company SoFi Invest, which is widely used by millennials. Cointelegraph also reported earlier that Stack Funds research shows that 50% of Bitcoin’s investors are millennials.
Another interesting commonality between Bitcoin and Tesla is the revolutionary impact associated with the two assets, as Tesla is greatly altering the way the company operates.