Recently, the price of Bitcoin and Tesla shares have both found themselves in the spotlight, leading some retail investors to wonder whether the two assets share common characteristics. Bitcoin (BTC) continues to hover around the $12,000 level (at the time of writing), hitting uncharted highs since June 2019.
Tesla shares have also achieved several goals. On August 20, the share price reached an all-time high, gaining more than 45% in 10 days and closing above the level of $2,000 per share.
Furthermore, the data indicates that last month Bitcoin was the most viewed asset in the United States, second only to Tesla shares.
Is Bitcoin behaving like a tech stock?
The growing interest in Bitcoin and Tesla has led some people to wonder if BTC is behaving more like a tech stock. The results of the analysis carried out by CoinShares, a crypto asset management company in London, reveal that in its growth phase Bitcoin is actually behaving like a tech stock:
„Bitcoin’s risk profile is very similar to that of a tech security: if it realizes its potential, the value could be immense, but at the same time, there is a probability that it will fail completely“.
As much as this reasoning may seem valid, Phil Bonello, research director of the Grayscale Investments crypto fund, has specified in a comment to Cointelegraph that it is not enough to observe the returns to draw conclusions about possible relationships between Bitcoin and Tesla, when BTC has risen only 63% since the beginning of the year and TSLA has marked an increase of 365%:
„Many risk assets have been correlated because of the strength or weakness of their common denominator: the US dollar. Moreover, when the assets see strong sell-offs like those occurred in March, the correlation is close to 1 because they all need liquidity“.
Bonello’s reasoning is proved by the The News Spy collapse towards the minimum of 361$ happened in the day of March 18th. Also Bitcoin has reached a minimum of almost 3.800$ in the same month. Bonello added that although he does not look closely at the details of Tesla, the asset is currently in a prolonged bull market. „I tend to believe that we are in a prolonged bull market driven by monetary and fiscal stimulus,“ he explained.
Natalia Karayaneva, advisor to Arrington XRP Capital and CEO of Propy (a blockchain-based real estate platform), echoed Bonello by saying that new bubbles are emerging around the stock market and Bitcoin:
„Instead of buying tangible consumer goods, people are investing in these assets to get rid of fiat currency. In the same way, institutional operators are investing in everything related to digital assets“.