Tesla Stock Shows Correlation with Bitcoin's Sharp Drop
Bitcoin Hits $45,000 Intraday
Tesla Enters $600 Range
[Asia Economy New York=Correspondent Baek Jong-min] The stock price of electric vehicle company Tesla plummeted again, linked to the value of Bitcoin. Bitcoin showed a clear bearish trend, falling to as low as $45,000 during the session.
On the 23rd (local time), Tesla's stock price fell 6% in pre-market trading on the Nasdaq market, followed by a drop to the $600 range during regular trading.
As of 9:32 a.m. that day, Tesla's stock price was at $669.92, down 6.24% from the previous day.
Tesla had fallen 8.5% the day before, marking its largest drop since September last year. The two-day decline approached 15%.
Last December, Tesla's stock price surged vertically from the $600 range to around $800 on the back of its inclusion in the S&P 500 index. CNBC reported that Tesla's stock price has turned negative since the beginning of this year.
The sharp drop in Tesla's stock price is analyzed to be linked to the decline in Bitcoin's value. On that day, Bitcoin fell as much as 17% during the session to $45,000, then recovered to the $48,000 range, showing a decline rate of about 8%.
Bitcoin had plunged 17% during the session the day before after Tesla CEO Elon Musk commented that it "looks expensive," and U.S. Treasury Secretary Janet Yellen warned that it is "speculative and inefficient." Bitcoin seemed to recover from the sharp decline but then deepened its losses again.
Wedbush Securities analyst Daniel Ives told CNBC that Tesla's stock price is linked to Bitcoin's value. He estimated that Tesla likely made a $1 billion profit from purchasing $1.5 billion worth of Bitcoin the day before but pointed out that "now (holding Bitcoin) is acting as a risk."
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