Tesla Has Lost $200 Billion In Value Since Bitcoin Investment
Elon Musk’s electric car company Tesla has lost more than 25% of its total market value after investing in Bitcoin.
However, the investment appears to have had an adverse effect on the car manufacturer, which has since lost more than $200 billion in market value.
Analysts say the huge decrease in Tesla’s value is mostly down to the fact that the company’s shares are now heavily tied to the value of Bitcoin, which has been known for its volatility, particularly over recent months.
These concerns appear to have reached investors, who have been selling off shares over fears they could lose out if the price of Bitcoin begins to plummet.
‘By Musk and Tesla aggressively embracing Bitcoin, investors are starting to tie Bitcoin and Tesla at the hip,’ Wedbush Securities analyst Dan Ives told BBC News.
‘The recent 48-hour sell-off in Bitcoin and added volatility has driven some investors to the exits on this name in the near-term.’
Although Bitcoin prices did initially surge by around 50% following Tesla’s investment, they have since dropped by around 7%, after Musk tweeted that the cryptocurrency’s prices appeared ‘a little high’.
The sudden decrease in Tesla’s value even led to Musk losing his six-week-long title as richest person in the world, handing the top spot back to Amazon founder Jeff Bezos.
Prior to the recent volatility, it was a big year for Tesla, with shares soaring by 740% in 2020 alone, however Forbes reports stock is now at its lowest level since before it made its way into the S&P 500 in December.
The company now has a market value of around $620 billion.
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