Tesla and BTC don't have the value that markets reflect today.
Bitcoin's recent rapid growth has caught everyone's attention. Since September, the cryptocurrency has recorded a performance of around 670%, reaching a new high of over $ 57,000 in recent days. This case joins Tesla’s. We believe that both assets have an unjustified quotation, which finds no real explanation.
As already discussed in a previous analysis (SHOT VIEW: Is Tesla really worth that much?), the price of Tesla today does not reflect even the most optimistic expectations on the business. Despite this, the stock continued to rise, reaching record price levels. We struggle even more to find a logic behind all this after the recent decision of the Tesla founder to invest $ 1.5 billion in Bitcoin, putting at risk in an absolutely uncertain bet about 8% of the liquidity declared at the end of 2020 .
It is an investment in a highly speculative market segment, which does not rely on real elements. What is the use of Bitcoin today? None. We believe that it is not at all comparable to gold, which, apart from investments, is used in various sectors. Cryptocurrency expresses value simply because people think it has value. Despite the recent price spike, Bitcoin continues to be an extremely volatile asset with an unpredictable future. It can fluctuate by 10-20% in a single day, often for no apparent reason and there is still no certainty that this asset will find stable use in the future.
What is briefly expressed in our opinion highlights a major limit present today on the financial markets. The complete lack of desire for information of investors, who are easily influenced by the phenomena of the moment and the opinions of others, totally unaware of the risks they run. What has emerged in recent months is the ease with which the financial markets are manipulated. Suffice it to say that a few tweets and statements were enough to make the Bitcoin price soar in a few days. Lately, follow the social statements and base investment choices on them seems to be a very well-paid trend, but we struggle to understand the logic.
We believe that what is happening today on some quotations has no real sense or justification to support it. It is simply pure speculation, based on superficial information, which moves and rewards assets that in our opinion have very little of the value that the market attributes to them today.