Shares of Tesla stock had recently closed down at a bearish 8.55% on Monday as certain investors bet on a particular pandemic comeback that could rotate out Big Tech and suddenly piled into cyclical stocks. This is Tesla's largest bearish drop since Sept 23, 2020 when the company had previously closed down at a whopping 10.34%.
Why is Tesla stock dropping so much?
According to the story by CNBC, shares of the company's supposed Big Tech peers actually dropped on Monday as well as Microsoft, Amazon, and even Apple were reportedly down by over 2%. Overall, the said Nasdaq Composite suddenly fell by 2.5% on Monday while the reported Dow Jones Industrial Average also reversed a particular 200-point loss in order to close up on 0.1%.
Tesla stock could have reportedly also been dragged down from its Bitcoin investment, which had really slowed its rally on Monday. The coin was bearish by 6% after the said bell on Monday, according to the report from CoinDesk.
How much Bitcoin did Tesla buy?
Some time earlier this month, Tesla had disclosed that it had purchased a whopping $1.5 billion worth of Bitcoin in order for the company to gain "more flexibility" as well as to further diversify and even maximize returns on their said cash. The company also noted that it plans to start being able to accept Bitcoin payments.
Early estimates, however, from a particular prominent technology analyst known as Dan Ives already sees the new investment by the said electric-vehicle maker, also headed by the outspoken CEO Elon Musk, already minted a digital paper profit of just at least $1 billion as the recorded price of bitcoin asset soars to certain records.
According to Dan Ives the Wedbush's prolific analyst, based on their calculations, they actually estimate that Tesla has already made somewhere roughly around $1 billion of profits over the course of the last month, according to the story by MarketWatch.
Read Also: Elon Musk, Tesla BTC Fake Giveaway Emerge Online, Claiming to Give 10x Amount in Coins
Elon Musk Bitcoin move versus EV sales
In order to put this in perspective, Ives noted that Tesla is now on a trajectory for the company to be able to make more coming from its Bitcoin investments as opposed to actual profits coming from their electric vehicles during the entire 2020.
The recent move by the company to invest in bitcoin was actually seen as further confirmation of the said legitimacy of the nascent asset that still did not exist some time around 12 years ago.
It's still worth noting, however, that due to the way accounting rules work when it comes to intangible assets, Tesla still cannot recognize the gains it has made in its bitcoin investment until the company decides to sell for profits.
In contrast, Tesla will also have no record losses if the total value of bitcoin would fall before its said purchase price, even if the move still isn't associated with a certain sale.
On Friday, Bitcoin's reported price soared to up to $54,000 and was able to breach a total market valuation of a whopping $1 trillion.
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This article is owned by Tech Times
Written by Urian Buenconsejo
