Market analysts are arguing that Tesla’s exposure to Bitcoin (BTC) may be the reason for its sharp decorrelation from Big Tech in recent weeks. As of Wednesday, July 14, the 20-day correlation between the company’s price and the Nasdaq 100 index has dropped from 0.83 on June 17 down to 0.14.
Whereas Tesla has shed almost 4% this month, the Nasdaq 100 is up by over 2%. Weakened correlation between Tesla shares and the NYSE FANG+ index is also observable, as BNN Bloomberg reported. Amy Wu Silverman, a derivatives strategist at RBC Capital Markets, told reporters:
“Tesla is highly correlated to megacap tech […] this relationship has really decoupled in the near term. When I ask around, the feedback I get is that this is related to their Bitcoin exposure and how it will have to be accounted for when they report earnings.”
The EV maker’s earnings report is due July 26. Tesla’s eventful and controversial relationship with Bitcoin dominated headlines —