Tesla and MicroStrategy are gradually eroding Bitcoin’s lustre.

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Bitcoin was as beneficial to Tesla and MicroStrategy as it was to them — but the gains are beginning to wane for Bitcoin’s corporate flingees.

High-profile coin investments by corporate companies such as MicroStrategy and Tesla were credited with helping to drive up the price of Bitcoin (BTC) during the end of 2020 and beginning of 2021.

Allotting billions of dollars worth of Bitcoin to their balance sheets had a knock-on effect on the stock prices of Tesla and MicroStrategy, both of which were subject to 340% and 808% pumps respectively from the moment their CEOs began stacking sats and posting crypto memes.

But the glow afforded Tesla and MicroStrategy by their headline-grabbing Bitcoin purchases proved to be short-lived. After the share prices of both stocks peaked in early February, MicroStrategy shed value on its way to 64% losses, and Tesla went on to experience its worst losing streak in three years after losing 36% in the past three and a half months.

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Tesla shares were worth $580 on Monday, down from February’s high of $880. MicroStrategy’s shares were worth $448, down from February’s high of $1,272.

Prior to the first Bitcoin acquisition in August 2020, MicroStrategy was valued at $140. When Tesla CEO Elon Musk started tweeting Bitcoin and Dogecoin (DOGE) memes in earnest in mid-2020, Tesla shares were worth around $200.

Bitcoin’s continued rise in the face of stock market losses may indicate that traditional investors were less likely to bet on Bitcoin’s continued growth than those in the crypto space. Bitcoin rose in value for two months before reaching its latest high of $65,000, before collapsing, resulting in a 52 percent decline before a strong recovery.

Tesla and MicroStrategy’s failure to recoup their Bitcoin losses, as well as Elon Musk’s inability to drive stocks as he once did, may indicate that the crypto room is becoming resistant to such corporate meddling (or that the weight of the current market collapse is too great for even Musk’s power to reverse).

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Ethereum co-creator Vitalik Buterin recently suggested as much, claiming that the power exercised by people like Musk would quickly dwindle. “However, I believe the markets will learn. Elon would not be able to wield that power indefinitely, according to Buterin.

 

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