Tesla Stock is now Tied to the Value of Bitcoin, says Wedbush Analyst

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Daniel Ives, an analyst at Wedbush
Daniel Ives, an analyst at Wedbush

Few hours after Elon Musk CEO of Tesla disrupted the Bitcoin (BTC) rally with the “seem high” tweet, Tesla (NASDAQ: TSLA) stock plunged 15% to $698 per share. The stock downturn followed Bitcoin’s 16% dip when it traded as low as $45,389. Daniel Ives, an analyst at Wedbush said that Tesla’s share price is now tied to Bitcoin.

In an email sent to CNBC on Tuesday, Ives said “Musk is now tied to the bitcoin story in the eyes of the Street and although Tesla made a billion paper profit in its first month owning the digital gold, it comes with added risk, as seen this week.”

“With Tesla diving into the deep end of the pool on bitcoin, Musk runs the risk that this sideshow can overshadow the fundamental EV (electric vehicle) vision in the near term for investors. However, it’s a smart move at the right time for Tesla.” He added.

On Sunday, Ives estimated that Tesla profited over $1 billion from its $1.5 billion investment in the digital token. However, there is no information on whether or not the electric car manufacturer had sold its Bitcoin holdings.