Is Tesla Stock on the Verge of a Bubble? Exploring the Fractal Similarities with Bitcoin

Bubble Talk: Can Tesla Stocks Burst Like Bitcoin?

Julian Bridgen, co-founder of MI2 Partners, has thrown down the gauntlet regarding Tesla Inc. (TSLA) stock, suggesting it may be following a familiar bubble trajectory. In Bridgen’s eyes, Tesla’s stock performance echoes Bitcoin’s rollercoaster of 2017—the wild year Bitcoin reached dizzying heights of $20,000 only to plummet 58% in mere months. Fast forward to now, and Tesla’s stock has already seen a drop of 33.74% from its yearly high, making many wonder if history is destined to repeat itself.

Charting the Similarities: Tesla vs. Bitcoin

Bridgen isn’t throwing these claims around lightly; he shared a correlation between Tesla’s stock charts and Bitcoin’s price movements from 2016 to 2019. His chart showcases a fascinating fractal pattern that is raising eyebrows among analysts and investors alike. Bridgen notes, “What defines a bubble? A great story is essential. In fact, the better the story, the bigger the bubble.” He’s not wrong—after all, Tesla boasts an impressive narrative of innovation and ambition that draws in investors like moths to a flame.

A Few Notable Differences

While the graphical similarities are striking, it’s essential to remember that Tesla and Bitcoin exist in entirely different worlds. Tesla is a publicly traded company, subject to market fundamentals and company performance, whereas Bitcoin operates as a digital currency that many now view as “digital gold.” This distinction shouldn’t be brushed off lightly. For instance, when MicroStrategy invested a whopping $250 million in Bitcoin, it was signaling a different form of asset engagement altogether.

Future Catalysts for Tesla Stock

Despite the bubble concerns, there is hope for Tesla stock’s resurgence, driven by several upcoming catalysts, as outlined by Credit Suisse analyst Dan Levy. These are:

• S&P 500 Inclusion: The anticipation of Tesla being added to this elite index could fuel stock prices.
• Battery Technology Day: Set for September 22, analysts are keenly evaluating potential groundbreaking battery technologies that Tesla might unveil.
• Potential Stock Split: The buzz surrounding a possible stock split could drive investor interest and easy access.

The Big Questions Looming Over Bitcoin’s Future

So, what about Bitcoin? As it danced around the $10,000 mark post-2017’s peaks and valleys, it seems to be garnering more stability. This raises many eyebrows: Is this a new base for the cryptocurrency, or are we in for another wild ride? Notably, Su Zhu, CEO of Three Arrows Capital, expressed surprise at Bitcoin’s ability to hover above $10,000 and believes it signals a positive macro trend. Investors are hoping that the ghosts of 2017 won’t haunt either Bitcoin or Tesla’s stock any longer.