Tesla Stock And Bitcoin Price Correlation Revealed: What's The Common Link?

While Bitcoin is closely correlated with gold, new data has shown similarities between the benchmark cryptocurrency and Tesla stock.

Data from TradingView, a social network for traders and investors, shows Tesla stock (TSLA) is the most viewed asset in the United States with Bitcoin not far behind. Both assets have increased in price significantly. Tesla broke past $500 this September, a 600% increase from its $75 price last March. Bitcoin was up 137% in the same time period and showed a 60% increase since the start of 2020.

TradingView said Bitcoin interest is strong in the West Coast, particularly in California, Oregon and Washington. The South East is into Forex.

The correlation between Tesla stock and Bitcoin could be attributed to the similarities between the benchmark cryptocurrency and the S&P 500. According to Cointelegraph, millennial traders were actively trading both Bitcoin and Tesla stocks, with Bloomberg reporting that 10,000 traders bought Tesla stocks in one single hour on the millennial-focused app Robinhood on July 14. Additionally, data from Coin.dance revealed that the majority of Bitcoin investors were 18 to 34 years old, the same age group targeted by Robinhood.

This explains the similar pattern that both assets are traversing. For example, Tesla stock breached its record high around the same time Bitcoin crossed $12,000. Tesla continued to rise, printing a new all-time high on Aug. 31.

Both assets also experienced a slump in September. Tesla went downward to $330 before recovering. Currently, it is trading at $423. Bitcoin went from $12,000 on Sept. 1 to $10,160 on Sept. 3. It is currently trading at $10,924.

In a recent report, Julian Bridgen, co-founder of macroeconomic research firm MI2 Partners, said Tesla's daily price behavior is comparable to that of Bitcoin's weekly price behavior in 2017. He said both assets had a "strong story" behind, with Tesla pioneering electric cars while Bitcoin was increasingly becoming a store of value.