Bitcoin Is Down, but Tesla Is a Real Downer
Companies holding bitcoin in their treasuries have been hit hard in 2022
Shares of Tesla (TSLA) were down a whopping 56% in the past 90 days alone through Tuesday’s market close — capped off by a daily drop of 8%.
The one-time Wall Street darling’s decline has outpaced dropping, and highly volatile, equity and spot cryptocurrencies markets this year. It’s now in a 66% hole from its all-time (split-adjusted) high of $414.50, set on Nov. 4, 2021.
The epic fall of the electric carmaker mirrors that of bitcoin in 2022, up about 2.6% on the day as of 5 pm ET— but down 65% year to date.
Bitcoin’s volatility of late has been remarkably muted, according to research firm BitOoda, which said in a Tuesday report that “a prolonged period below 200-day [exponential moving average] has built price stability to the downside, and BTC seems to have support at [$]16,000.”
Tesla is the third-largest publicly traded company to hold BTC on its balance sheet, behind MicroStrategy (MSTR) and crypto miner Marathon Digital (MARA), and just ahead of Hut 8 Mining (HUT), according to BitcoinTreasuries.
The performance of all four companies now lags that of the underlying spot bitcoin for the year for the first time since May.
Just a week ago, markets were reacting positively to cooling inflation numbers in the US and a more measured interest rate hike from the Federal Reserve. But Tesla did not participate in the short-lived rally, as the market weighed the impact of CEO Elon Musk’s Twitter quagmire.
Last week, Musk sold $3.5 billion of his own stock, according to regulatory disclosures, further depressing sentiment. The stock has now neatly filled a two-year-old gap open from Nov. 17, 2020.
Tesla sold 75% of its bitcoin stash in the second quarter of 2022 but held the rest through the third quarter. The company is now down 52%, or about $174 million, on its crypto treasury bet. Its fourth quarter SEC disclosure is slated for late January 2023.
Other crypto-linked public companies have fared poorly, as well. And that may be putting matters mildly.
Shares of Coinbase (COIN) ended Tuesday on yet another all-time closing low at $34.97 — continuing their slide from last week. The stock is now 90% off its post-IPO high at the peak of the crypto bull market.
Also down 90% from its highpoint is Musk’s crypto darling dogecoin (DOGE). It’s been more than two months since the billionaire last paid homage to the meme coin on Twitter.
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