Daniel Ives: BTC and Tesla Are Practically One and the Same
In a recent interview, Ives says that when Tesla goes up, bitcoin will follow suit and vice versa. Tesla can also expect to see action whenever bitcoin makes a move. Not too long ago, the company purchased as much as $1.5 billion worth of the digital asset. The purchase was so big that the currency and shares in the company are now practically one and the same.
Musk is now tied to the bitcoin story in the eyes of the Street, and although Tesla made a billion-paper profit in its first month owning the digital gold, it comes with added risk, as seen this week. With Tesla diving into the deep end of the pool on bitcoin, Musk runs the risk that this side show can overshadow the fundamental EV (electric vehicle) vision in the near term for investors.
Earlier in the week, the price of bitcoin hit a real barricade, having fallen from around $56,000 per unit to just over $47,000. This constitutes a two-day loss of approximately $9,000. Thus, Tesla and many other companies that invested late in bitcoin are probably feeling the heat right about now.
Still, Ives comments that investing in BTC was the right move to make on Tesla’s part, though he did mention that there is a scary side to Tesla’s recent decisions. He says:
On the downside, it’s playing with firecrackers and risks and volatility are added to the Tesla story.
Already, we are witnessing both Tesla and bitcoin work hand in hand. Following the crypto’s legendary drop, shares in the electric car company slipped as much as 11 percent each, thereby proving that both assets are deeply connected to one another. This was Tesla’s largest drop in the past five months, having fallen by more than ten percent last September. Ironically, that period proved to be rather bearish for BTC as well.
Both Assets Have Fallen This Week
Bitcoin ultimately took a serious dive not too long after Musk had issued a message on Twitter calling bitcoin’s and Ethereum’s prices “too high.” Eric Lonergan – fund manager at M&G – explained in a statement that Musk needs to get it together on social media or things like this are going to keep happening. He says:
When your Twitter feed is non-stop about an asset, that is a huge warning signal. In the world of social media narratives, you’ve got to be extremely careful. When the personality of a CEO is ten times bigger than the cars they’re manufacturing, you’ve got to take this stuff with… you know… this is rather dangerous territory from an investment standpoint.