Shares of Tesla (TSLA) have surged in recent months, as the electric carmaker has gained investor support. However, some are pointing out the eerie similarities between Tesla and Bitcoin, circa 2017.
Few would argue that the price of bitcoin in late 2017 wasn’t a bubble. Even the most hardened Bitcoin maximalist would be forced to acknowledge that the hype then caused lofty valuations. Now it appears to be Tesla’s turn.What defines a bubble? A great story is essential. In fact, the better the story the bigger the bubble. Then lots of liquidity and finally a classic bubble chart. For example, #bitcoin in 2017. In #TSLA we have all three. pic.twitter.com/EVz8MKuWEv
— Julian Brigden (@JulianMI2) September 10, 2020
Comparing Charts
Bitcoin went above $20,000 on December 17, 2017. The price had reached $10,000 just a month earlier, and the coin had grown 2000% in the course of a single year. Many were crying ‘bubble’ during its peak, but some nevertheless continued to buy. Tesla has had a similar year. The 52-week low for the company sits at $43.67, with a 52-week pre-split price of $2,318. Such a huge increase reveals a similar pattern of meteoric growth. At the peak, the carmaker was worth more than Ford, GM, and Chrysler combined. Founder Elon Musk also saw huge wealth generated by the price increases.Why the Tesla Bubble?
The deeper question lies in the correlation. Why would Tesla follow a pattern like bitcoin’s? The answer may be that both offer forward-looking technologies that solve deeper problems. Tesla offers a way to revolutionize fossil fuel emissions while Bitcoin intends to revolutionize money.Bitcoin’s Recovery
With both offering revolutionary solutions, the future of Tesla may not be as bleak as the chart correlation suggests. Bitcoin is currently trading above $10,000, with recent spikes above $12,000. While still a far cry from the peak of the bubble, the price is back to pre-spike levels. Will Tesla follow that pattern, cratering after the run-up, but then recovering afterward? Only time will tell.
Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
Jon Buck
With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about cryptocurrencies and blockchain technology for some of the biggest publications and ICOs in the industry. After a brief stint in India, he and his family live in southern CA.
With a background in science and writing, Jon's cryptophile days started in 2011 when he first heard about Bitcoin. Since then he's been learning, investing, and writing about cryptocurrencies and blockchain technology for some of the biggest publications and ICOs in the industry. After a brief stint in India, he and his family live in southern CA.
READ FULL BIO
Sponsored
Sponsored