Bitcoin and Tesla share price has come into the spotlight recently, leading some retail investors to question if there is any similarity between the two assets. With Bitcoin (BTC) continuing to hover around the $ 12,000 mark (at time of publication), the largest coin by market capitalization has reached its highest level since 2019 which has not been seen since June 2019.

Tesla stock has also set a number of benchmarks. On August 20, Tesla’s share price reached an all-time high, rising 45% in 10 days to close above $ 2,000 per share.

Additionally, data indicates that Bitcoin was the most popular commodity after Tesla shares in the US last month.

Does Bitcoin behave like a technology stock?
The growing interest in Bitcoin and Tesla raises some questions about whether BTC is behaving like a tech stock. Findings by London-based digital asset manager CoinShares show that Bitcoin is, in fact, behaving as a technology reservoir in its growth phase:

“Bitcoin’s risk profile is similar to the stock of technology: if it reaches its potential, its value can be enormous, but at the same time there is a non-zero chance of it failing entirely.”

While that appears to be the case, Phil Bonello, research director at Grayscale Investments crypto fund, told Cointelegraph that it was not fair to just consider returns when drawing conclusions between Bitcoin and Tesla, with BTC up about 63% so far and TSLA with an increase of $ 365%:

Most of the risk weighted assets were related to each other because they all depended on the strength or weakness of the denominator: the US dollar. When the assets are sold aggressively, as in March, the correlation approaches 1 as everyone needs cash. ”

Bonello’s argument is confirmed by the fact that Tesla’s stock fell as low as $ 361 on March 18. Bitcoin hit a low of nearly $ 3,800 in March. Bonello went on to note that there is currently a secular bull market, although he is not closely monitoring Tesla details. “I tend to believe that we are in a secular bull market driven by monetary and financial incentives,” he said.

On Bonello’s basis, Natalia Karaianeva, Arrington XRP Capital consultant and CEO of Propy – a blockchain-based real estate platform – told Cointelegraph that new bubbles are emerging in the exchange and Bitcoin:

“Instead of buying physical consumer goods, people invest in those assets to avoid being caught in a legal order. Institutional investors also invest in everything related to digital assets.”

What are the similarities between Bitcoin and Tesla?
Aside from market cap, it’s interesting to keep in mind the inherent similarities between Bitcoin and Tesla. Bitcoin and Tesla both share the potential for explosive growth, according to Bonillo, which makes them especially volatile and reflective.

This point also applies to most cryptocurrencies, not just Bitcoin. Matte Greenspan, cryptocurrency market analyst and founder of Quantum Economics, told Cointelegraph that he has been tracking the relationship between TSLA and the Chainlinks LINK token, which is the world’s fifth largest coin by market cap. Greenspan’s results highlight the volatility of the two asset classes.

Tesla post compared to LINK code

Millennial retail investors seem to be more interested in volatile assets like Tesla and cryptocurrencies. In fact, recent evidence supports this, with CNBC finding in February that Tesla was the most widely held stock of personal finance company SoFi Invest, one that millennials use in abundance. Cointelegraph also previously reported that research by Stack Funds shows that 50% of Bitcoin investors are millennials.

Another interesting similarity between Bitcoin and Tesla is the revolutionary effect of assets, with Tesla severely disrupting the transportation sector while Bitcoin aims to revolutionize finances.

Bitcoin remains a unique commodity
While disruptive technologies like Bitcoin and Tesla can interest young investors with similar behaviors, Bitcoin remains a unique asset class. Grayscale’s Bonello noted that Bitcoin’s unique properties can make it an attractive investment, but it has also been a challenge for traditional investors to understand its value, “especially since Bitcoin does not offer cash flows like other assets like Tesla.” Note.

Source: CoinTelegraph