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Tesla Has Lost $200 Billion In Value Since Bitcoin Investment

by : Emma Rosemurgey on : 28 Feb 2021 14:34
Tesla Has Lost $200 Billion In Value Since Bitcoin InvestmentPA Images

Elon Musk’s electric car company Tesla has lost more than 25% of its total market value after investing in Bitcoin.

Earlier this month, February 8, the company disclosed a $1.5 billion investment in Bitcoin, initially sending the value of the cryptocurrency flying.

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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.

Elon MuskPA Images

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.

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‘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’.

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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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Emma Rosemurgey

Emma Rosemurgey is an NCTJ trained Journalist who started her career by producing The Royal Rosemurgey newspaper in 2004, which kept her family up to date with the goings on of her sleepy north east village. She graduated from the University of Central Lancashire in Preston and started her career in regional newspapers before joining Tyla (formerly Pretty 52) in 2017, and progressing onto UNILAD in 2019.

Topics: Technology, Bitcoin, cryptocurrency, Elon Musk, Tesla

Credits

BBC and 1 other
  1. BBC

    Bitcoin: Elon Musk loses world's richest title as Tesla falters

  2. Forbes

    Tesla Has Plunged 25% And Lost $200 Billion In Market Value Since Its Bitcoin Investment