Has Tesla Stock Decoupled From Big Tech Stocks Like Apple, Facebook Due To Bitcoin?

Apex cryptocurrency Bitcoin BTC/USD may be the reason for the recent decline in correlation between shares of Tesla Inc. TSLA and other large U.S. technology companies, Bloomberg reported Wednesday, citing RBC Capital Markets derivatives strategist Amy Wu Silverman.

What Happened: The 20-day correlation between Tesla’s stock price and the Nasdaq 100 index fell from 0.83 on June 17 to 0.14 as of Wednesday, July 14, while the correlation between Tesla’s shares and the NYSE FANG+ Index has also declined, as per the report.

See also: How to Buy Bitcoin (BTC)

The NYSE FANG+ index includes the biggest U.S. tech firms such as Facebook Inc. FB, Apple Inc. AAPL, Amazon.com Inc. AMZN, Netflix Inc. NFLX and Alphabet Inc. GOOG GOOGL.

Stock correlation refers to the movement of two stocks in relation to one another.

Silverman was quoted by Bloomberg as saying she has received feedback that the decoupling of Tesla’s relationship with the largest technology companies ahead of the EV maker’s upcoming earnings report is related to the Pal Alto-based company’s Bitcoin exposure.

Tesla is scheduled to report its second-quarter earnings results on July 26.

See Also: Is Bitcoin Losing Its Sheen Among The People?

Why It Matters: Tesla said in February that it has invested $1.5 billion in Bitcoin and announced later it has begun accepting payments for its vehicles with the apex cryptocurrency.

While reporting its first-quarter earnings in April, Tesla said it sold $272 million worth of its Bitcoin holdings in the quarter.

Tesla CEO Elon Musk later caused a stir in the cryptocurrency markets when he said in May that his company will no longer accept Bitcoin for vehicle purchases over concerns of the cryptocurrency’s environmental impact. The price of Bitcoin tumbled after Musk’s announcement.

Bitcoin is down 50% from its all-time high of $64,863.10 reached in mid-April.

Price Action: Tesla shares closed almost 2.3% lower in Wednesday’s trading at $653.38.

Bitcoin is up almost 1.4% during the last 24 hours, trading at $32,399.71 at press time.

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