Tesla dipped below where it entered the S&P 500 and bitcoin dropped below $50,000.
At last check, Tesla shares were down 11.55% at $631.99, below the level at which Tesla entered the S&P 500 in December, extending Monday’s 8.55% drop. As of Monday, Tesla shares have fallen 19% from their Jan. 26 record. Tesla closed at $695 on Dec. 18, the last session before it was added to U.S. stock benchmark.
Bitcoin, meantime, was down 11% at $47,067, according to CoinDesk, well below its recent record highs and a fair distance from the $50,000 mark it hit late last week - a rise that gave it a market value of more than $1 trillion for the first time on Friday.
The world's biggest electric-vehicle maker and the world's biggest and best-known cryptocurrency became intertwined last week after Tesla disclosed in a regulatory filing that it had made a $1.5 billion investment in bitcoin earlier this month.
However, the world’s largest digital token took a hit over the weekend and into Monday after Musk suggested on Twitter that bitcoin and other cryptocurrency valuations “seem high."
Bitcoin’s rise has been fueled in part by speculators betting it will be the dominant digital currency. But it's also been driven by institutional investors who are buying into the idea that bitcoin specifically is “digital gold” - an asset class that has equal if not greater chances of retaining its value, and in turn being a hedge against risks such as inflation.
Payment giants including Mastercard (MA) - Get Report and PayPal (PYPL) - Get Report have indicated they are embracing bitcoin, while both Twitter (TWTR) - Get Report and Amazon (AMZN) - Get Report have indicated that they too are exploring how to transact in and support digital currencies.
Tesla’s share price has continued its own march higher amid investor expectations that the company will continue to dominate the electric-vehicle market, even as other automakers including Ford (F) - Get Report and General Motors (GM) - Get Report unveil large-scale plans to ramp up their own EV production, and as EV-focused players including NIO (NIO) - Get Report, XPeng (XPEV) - Get Report and Li Auto (LI) - Get Report continue to ramp up production and grab market share.
Electric vehicle startup Lucid Motors is the latest to jump into the growing EV marketplace, with the company announcing it has agreed to merge with a blank-check company started by investment banker Michael Klein that values the combined entity at a pro-forma equity value of $24 billion.