Tesla stock (TSLA) is exploding right now as investors appear to be suffering from a serious case of FOMO.
The market cap of Elon Musk’s electronic car empire broke $100bn on Wednesday, making it the first publically listed automaker in the US to cross that mark.
According to Wall Street veteran and CEO of Galaxy Digital Mike Novogratz, yes. He took to social media yesterday to comment that Tesla stock was “starting to feel like $BTC in 2017… a mania”.
— Michael Novogratz (@novogratz) January 22, 2020
Tesla stock seriously blowing up
On Wednesday, the price of Tesla stock rose by more than 8% at one point, and its market capitalisation crossed $100bn for the first time. Its after-hours trading price reached $572.
This makes Tesla the first publicly traded American automaker to achieve such a number. And the price is still soaring.
In just over three weeks of 2020 so far, TSLA has produced a year-to-date return of more than 35%. That beats out even Bitcoin, which registers around 20% for the same period.
Rising from the ashes
While it’s generally believed that Bitcoin has a negative correlation with the stock market (when stocks are up, BTC is down and vice versa), there are certainly some parallels between TSLA and BTC.
Just like Bitcoin, the electronic car maker has had it rough over the last couple of years. In 2018, Mr Musk faced a lawsuit from the US Securities and Exchange Commission (SEC) over a “misleading” tweet about taking the company private.
Am considering taking Tesla private at $420. Funding secured.
— Elon Musk (@elonmusk) August 7, 2018
Both he and his company were fined $20 million, making it the most expensive tweet on record. He was later forced to rescind his position as Tesla’s chairman.
Then, in May 2019, Tesla was teetering on the verge of bankruptcy. In fact, Musk claimed that Tesla would be out of money in 10 months without “hardcore” changes. Tesla stock plunged by 22% that same month to trade at around $180 per share.
Meanwhile, Bitcoin (which lost 84% of its value in 2018) also experienced troubled times last year. Hitting a high of almost $14,000 in June, BTC closed 2019 at just over $7,000.
However, both assets have started 2020 on a high note, registering 35% (TSLA) and 20% (BTC) year-to-date returns.
Just as analysts see Tesla stock continuing to rise, many in the cryptocurrency industry believe that the Bitcoin halving will spur a bull market later this year. This means that the price of Bitcoin could also rise astronomically.
Of course, even the best analysts can get it wrong. It’s impossible to predict BTC or TSLA price with any degree of certainty.
However, both these assets have a series of positive market factors that could push up their price. And when it comes to Tesla stock, it looks like it’s going to be an interesting ride.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.