Bitcoin is considered by many to be the world’s most powerful asset, but the king of cryptotechnology may have an unexpected competitor in the face of Tesla stock (TSLA), as its market capitalization is now breaking through $100 billion.
Tesla – the first listed US car manufacturer to break through $100 billion
On Wednesday, the price of Tesla shares enjoyed another significant rally amid a general bull market in the US equity market. The stock has risen over 8% since the meeting opened, with market capitalization passing the $100 billion mark for the first time in its 17-year history. Elon Musk’s company is thus the first listed American automobile manufacturer to succeed in doing so.
The Tesla share, which is listed on the NASDAQ with the ticker TSLA, is currently traded at 592.11 dollars and is still fluctuating strongly. The share price started the year at $430, indicating that the return since the beginning of the year has been above 35%. By comparison, Bitcoin has risen by 20% over the same period.
Now Tesla is worth more than Ford and General Motors combined. The company has already overtaken Volkswagen as the second largest car manufacturer in the world by market capitalization. The next target is Toyota, by far the largest car manufacturer – with a market value of just over 200 billion dollars.
But, according to a Wall Street analyst, this is achievable in the coming years.
According to Pierre Ferragu of New Street Research, Tesla’s price target for the next 12 months is 800 dollars. By 2025, Tesla could become the largest automaker in the world. The company will be able to deliver up to 3 million cars per year over the next five years, bringing its inventory to $1,100 or even $1,700.
This suggests a market capitalization of between 250 and 530 billion dollars.
Can Bitcoin keep up the pace?
Tesla’s rally started in June last year, while Bitcoin started in the spring. In the last six months, Musk’s company has gained more than 130%, while Bitcoin is showing a negative return. For 2019, Bitcoin has almost doubled, while Tesla gained over 40%.
However, TSLA seems to be on fire right now and can update its peaks amidst continued optimism. The market values of the two assets are also comparable, with Bitcoin’s total capitalization still over $150 billion.
Last week, Cathie Wood, CEO of ARK Invest, also made a bold forecast for Tesla. According to the forecast, the share price will rise to $6,000 over the next five years, making the company a trillion dollar giant.
In this scenario, Bitcoin could fall behind if it does not stick to the price-performance predicted in the stock-to-flow model.
It remains to be seen whether Wood’s scenario will work. But one thing is certain: The race between these assets will be interesting to watch over the next five years.