This is Why Tesla Had its Biggest Drop Since September

Shares of electric vehicle maker Tesla were falling on Monday to close down 8.55%.
This was the biggest drop for the company since September of last year and may have been because of Bitcoin falling.

It was on Sept. 23, 2020 that Tesla had closed down 10.34%.

Earlier this month, Tesla said it had bought $1.5 billion worth of Bitcoin for “more flexibility to further diversify and maximize returns on our cash.”

The company also said it plans to start accepting payment in Bitcoin.

The company is “on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020,” remarked Wedbush Securities analyst Daniel Ives in a research note over the weekend.

Tesla’s investment into Bitcoin has already paid off big. The company has made about $1 billion in profits — at least on paper, according to estimates from Ives.

“That’s more than all they made on EV vehicles in 2020, but that continues to be the double-edge sword. It’s going to add risk to the story, and we’re seeing that in terms of the volatility,” Ives told Yahoo Finance Live.

The day Tesla made its announceement of buying such a staggering amount of Bitcoin, the cryptocurrency had skyrocketed almost 14% just that day.

Ives believes Bitcoin is still a “sideshow” when it comes to the Tesla story however.

“Most investors I talk to still view the goalposts relatively contained in terms of the assets, and it’s a side show because ultimately the overall story here is the transformational EV story,” said Ives. “Right now it’s Tesla‘s world and everyone else is paying rent in terms of EVs.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.