Tesla CEO Elon Musk lost his title as the world’s richest man after Bitcoin’s sharp correction and the company’s stock plummet (some analysts believe it is related).
Tesla stock (TSLA) fell 21% from its high of $890 on January 26, and the decline in the past two days has accelerated further, falling to $698. The share price of the electric car maker fell 13% on Tuesday, February 23, which was the stock’s worst day since the beginning of September.
Fox Business quoted Wedbush analyst Dan Ives and blamed the company’s association with Bitcoin for this week’s stock price decline. He also pointed out that he believes this move is a long-term strategic move.
“Investors are beginning to bundle Bitcoin and Tesla together. Although Tesla makes about $1billion on Bitcoin every month on paper, surpassing all electric vehicle profits in 2020, the last 48 The hourly bitcoin sell-off and more volatility prompted some investors to withdraw from this name in the short term,”
On February 8, Tesla’s stock traded at approximately $865, when it announced that the purchase price of Bitcoin was 1.5B. According to Yahoo Finance, the stock hit a low of $681 on February 23. However, reports of quality control issues in China may also affect prices.
Tesla owns about 48,000 BTC, which means that by the time the assets reached a record high of $58,000 on February 21, the book profit had reached $1 billion.
Despite the price plummet this week, the company is still making a profit from the purchase of Bitcoin because the asset was worth more than $39,000 when the purchase was announced (and the purchase occurred before).
The decline in Telsa’s stock price put Musk below the top of the Bloomberg Billionaires Index, with a recent loss reported to be $3.56 billion. According to Bloomberg News, Jeff Bezos’ total net worth is estimated at 187 billion U.S. dollars, while Musk’s net worth is 180 billion U.S. dollars, topping the list again.
At the time of writing, the price of Bitcoin dropped by 17% to approximately $48,000 in just three days, marking a decline of $10,000. In terms of callbacks, the market is accustomed to larger markets, such as the fall in mid-January, which caused BTC to adjust by 30%.