While it may seem that every analyst on Wall Street is discussing Tesla and Bitcoin right now, it’s important to understand the latest drop.
Don’t worry, you’re not the only one that’s getting tired of reading (and writing) about Elon Musk, Tesla (NASDAQ: TSLA), and Bitcoin…
But I guess we can’t just ignore the gaping, crypto-shaped red hole in the market today?
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Can Tesla escape Bitcoin?
Exactly a week ago we were discussing how Tesla’s decision to stop accepting Bitcoin tanked the crypto market. Well, the largest cryptocurrency on earth, Bitcoin, appears to be hitting back, seemingly dragging Tesla down with it yesterday due to the pair’s affiliation.
Of course, many other companies are affiliated with Bitcoin: Square, PayPal, Nvidia, just to name a few…
But all anyone wants to talk about is how “Elon Musk’s obsession with cryptocurrency is dragging Tesla down”, or “Tesla should focus on electric cars” etc. It can be pretty irritating, as long-term Tesla investors, to be subject to such volatility when it has almost nothing to do with the company’s fundamentals.
And perhaps there is an argument to be made about how Elon Musk tends to stoke the fire a bit with his tweets and actions, but it would be naive to think that Bitcoin will either make or break Tesla.
At least I hope it won’t…
While it’s easy to be distracted by the current crypto-mania that has gripped the media and investors alike, don’t get too worried about short-term volatility when days like yesterday happen.
At the end of the day, Tesla is a car manufacturer tha happens to hold some Bitcoin on its balance sheet.
This doesn’t diminish its massive potential in driver data and automated driving. That’s why, despite rising competition in Europe, China, and in the U.S., its brand remains at the forefront of the booming industry.
If you are long for those reasons, then Bitcoin shouldn’t change that.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold no positions in companies mentioned above. Read our full disclosure policy here.