The Amazing Connection between Bitcoin and Tesla

Photo by Austin Ramsey on Unsplash

The bitcoin bull market continues, up so crazy that it doesn’t even rationale. Outside the circle also came the happy news, 2021 January 7 when the new energy vehicle company Tesla stock was burst pulled, not only the company’s market value exceeded Facebook, Tesla founder Musk’s value also exceeded Amazon’s CEO Bezos, became the world’s richest person.

The wealth code of Tesla is simple. They are crazy to reduce the price of their products when their products are over-performing, and manufacturers are constantly iterating their functions, and the company can completely carry out product premium through the high-end image. The Model 3, which was previously sold for 540,000 RMB, has been reduced in price nine times, and so far, the Model 3 offer has become 249,000 RMB with subsidies. At the same time, the bitcoin price rose to 250,000+ RMB, officially completing the vision of “one coin, one Tesla”.

The sadness is for the owners who bought Tesla early, and the joy is for Musk. Tesla gained the attention of investors with its increasingly cost-effective price, and eventually, the stock was pulled out of the water, and Musk, the originator of the lower price, became the richest man in the world. Here’s an interesting point, if Bitcoin keeps up its current momentum and continues to rise to four times its current price, then Satoshi Nakamoto will surpass Musk and become the richest man in the world.

Although they are in different industries, both Bitcoin and Tesla actually share a similar path of rallying to riches. Both of them are leading projects in emerging fields, and both have recently experienced price spikes of varying degrees. The reason for the price spike is not the brilliant achievements of the projects in their own fields, but their own high-end concepts and their potential for development as determined in everyone’s mind.

Bitcoin, for example, is positioned by its creators as “a peer-to-peer electronic currency system,” but until now, a large portion of the market has used it as an investment tool to get rich, rather than a payment tool.

Similarly, Tesla is a seller of new energy vehicles, but their CEO still made his fortune by speculating in stocks. Not only are these similarities, but Musk, now the world’s richest man, asked around his friends before Christmas 2020 about “the possibility of converting ‘large transactions’ on Tesla’s balance sheet to bitcoin.” Inadvertently, the leader in new energy vehicles and the leader in crypto-digital currencies have also come together in a dreamy link-up across the board because of Musk’s investment philosophy.

Bitcoin and Tesla enjoy the good things together and carry the bad things together too.

The long side is singing the praises of how Bitcoin and Tesla will change the world, and the short side is going out of its way to tell everyone how big the Bitcoin and Tesla bubble has blown up to.

Bitcoin’s black fan head, the well-known economist Roubini, says that Bitcoin is not a currency, it can’t really be a form of payment, it has no utility, and its price is unstable. He also said that Bitcoin is a completely market-driven speculative item and that sooner or later the bubble will burst.

Besides, it’s not going well on Tesla’s end either, with some economists even comparing Tesla’s market cap, to Bitcoin, which is about to collapse in price in 2017. According to data shown by financial technology company S3 Partners, the number of investors shorting Tesla has skyrocketed, with the net short ratio already exceeding 18%. There have also been industry gurus who have said, “There is no logic in seeing such a high valuation for Tesla at the moment unless it is a true long term holder.”

It may be because both have contributed to the price spike through their own conceivable space, or it may be because the rise has been so rapid that it is somewhat unconscionable. So there is a lot of skepticism in the market about the brilliant results of Bitcoin and Tesla today.

The skeptics say that the price of Bitcoin and the market value of Tesla are both bubbles, and that bubbles are blown by capital and will burst one day.

Not only did Bitcoin and Tesla catch fire in the same way, but even the reasons for their disfavor are so similar. In any case, capital is still chasing the windfall by injecting large sums of money, and the two most promising projects, Bitcoin and new energy car Tesla, can naturally gain favor from the capital through the bright scenery they portray. However, too much attention and capital inflow will certainly blow up a certain bubble, which is the inevitable law and the natural choice of the market.

How much of the high market value of Bitcoin and Tesla is real, and how much of it is an illusion caused by the excitement of the market, depends on what will be left after the bubble bursts.

Article from Alice

Translated by Yang(Mengyan Finance)

To translate some latest policy and issues on blockchain and fintech happened in China