Bitcoin Plunged Last Weekend And Tesla’s Stock Price Also Rose
After the price of Bitcoin plunged last weekend, its price ushered in a rebound this Monday, and Tesla‘s stock price also rose simultaneously.
In the late trading hours of U.S. stocks on May 24, Eastern Time, Musk posted on social media: “Talk to some North American Bitcoin mining institutions. They promised to release current and planned renewable energy consumption, and Call on miners around the world to do this. This may have a future.”
On May 24th local time, the three major US stock indexes closed up. As of the close, the Dow rose 0.54% to 34,393.98 points, the S&P 500 rose 0.99% to 4,197.05 points, and the Nasdaq rose 1.41% to 13,661.17 points.
In the industry sector, large technology stocks collectively rose. Apple rose 1.33%, Amazon rose 1.31%, Netflix rose 1.01%, Google parent company Alphabet rose 2.92%, Facebook rose 2.66%, and Microsoft rose 2.29%.
It is worth noting that the price of Bitcoin and other cryptocurrencies rebounded after the sharp drop last weekend.
On Monday, Bitcoin, the largest cryptocurrency by market capitalization, broke through $39,000; at the time of the biggest decline last week, Bitcoin fell more than 50% from its highest value of $64,800. The price of Ethereum, the second largest cryptocurrency, exceeded $2500.
During the late trading hours of U.S. stocks on the 24th Eastern Time, Musk posted on social media: “Talking to some Bitcoin mining institutions in North America, they promised to release current and planned renewable energy consumption, and call for global The miners do this. It may have a future.” After Musk’s post, the Bitcoin transaction price jumped in the late trading of U.S. stocks.
In addition, on May 24, Tesla’s stock price also rebounded by 4.4%.
On May 23, the Bitcoin index fell sharply by nearly 17%, with a minimum of 31,192.40 US dollars per coin. Based on the peak value of $64,800 per coin around mid-April this year, the price of the world’s number one cryptocurrency has almost been cut in half.
Bloomberg statistics show that since the beginning of this year, Tesla’s stock price has fallen by 16.85%, and Musk’s personal net worth has also decreased by approximately $12.3 billion, making him the most shrinking billionaire in the Bloomberg Billionaires Index. This week, Musk’s ranking on the list also dropped to third.
And recently Bitcoin has become one of the biggest variables in its wealth. According to Tesla’s recent financial report, as of March 31, 2020, the fair market value of the company’s Bitcoin holdings was 2.48 billion U.S. dollars, which means that if the company cashes out, it is expected to make a profit of about 1 billion U.S. dollars. On March 31, the price of each bitcoin was 59,000 US dollars. Based on the calculation of “1 billion US dollars of its market value of 2.48 billion US dollars is profitable”, Tesla’s average cost of holding bitcoin was 25,000 US dollars per coin. Nowadays, with Bitcoin’s substantial discount, the substantial profits estimated in its financial reports have long ceased to exist. This wave of falling frenzy has also erased Musk’s Bitcoin earnings since late January.
Musk himself has become a little cautious about Bitcoin. On May 13, Musk, uncharacteristically, said that he would stop accepting bitcoin for car purchases on the grounds that bitcoin consumes too much energy and is not environmentally friendly.
Bank of America significantly lowered Tesla’s target price. The bank’s analyst John Murphy rated Tesla as neutral.
He emphasized, “Tesla took advantage of the stock market and stock boom to raise billions of dollars in funding in 2020. But in recent months, the market’s enthusiasm for electric vehicle stocks has cooled. Tesla sells more The potential of stocks to finance growth may cause greater dilution to shareholders. One problem for Tesla is that it is now more difficult for the company to raise funds in the stock market than it was six months ago.”
Wells Fargo also said that even after the recent correction, Tesla’s stock price still appears high, and its upside is currently very limited. The bank’s analyst Colin Langan said that Tesla has delivered more than 12 million vehicles in 10 years, which is larger than any current global automaker.