Since election day, Tesla (TSLA.O) and Bitcoin have significantly outperformed the S&P 500 index, rising 35% and 39% respectively, while the S&P 500 index only increased by 5%. Although there are clear narratives behind each, valuation issues are becoming increasingly complex.
First, let's talk about Tesla. Part of the rise in Tesla's stock price is attributed to the potential repeal of electric vehicle subsidy policies after President Trump's election, which could benefit Tesla as a leader in the electric vehicle sector. Analyst Dan Ives stated that this would be a significant competitive advantage for Tesla. Additionally, Tesla's autonomous driving strategy may also be accelerated, expected to bring a $1 trillion increase in market value. Currently, Tesla's market value is approaching $1.2 trillion.
As for Bitcoin, Trump once bought burgers for cryptocurrency enthusiasts using Bitcoin at a bar in Manhattan, which sparked market interest in Bitcoin. JPMorgan's cryptocurrency team pointed out that the Trump administration may provide a clearer regulatory framework for the cryptocurrency market, thus promoting further development and popularization of cryptocurrencies.
However, the current market performance of Bitcoin has also sparked some controversy. For example, some analysts have stated that Bitcoin's performance has surpassed Ethereum, with the price ratio of the two reaching a historically significant support level. This has led Ethereum to be viewed as a 'value investment'.
In this frenzy, even a benchmark measure for Bitcoin has emerged. Some analysts believe Bitcoin's price is still cheap compared to other cryptocurrencies, especially Dogecoin, which has surged more than 300% this year.
But this is not just an analysis of cryptocurrencies; bizarre phenomena such as the squirrel peanut (PNUT) cryptocurrency have emerged in the market. A squirrel named 'Peanut' in New York City became a controversial focus due to its popularity on social media, which led to the creation of a cryptocurrency that once had a market value exceeding $1 billion. This absurd phenomenon has sparked discussions about market bubbles.
However, some analysts also warn that investors should be cautious of market bubbles. Robert Teeter, chief investment strategist at Silver Peak Asset Management, cited that Andy Warhol once transformed everyday items like steel wool brushes into artworks, achieving significant appreciation. Therefore, today's investments may also hold similar appreciation potential.
In response to Tesla's soaring stock price, Swiss bank analyst Joseph Spak raised questions, arguing that Tesla's valuation is already too high. Spak believes that if Tesla wants to match its current market value by increasing car sales, it would need to sell 15 million cars annually by 2030, while the current market expectation is 4.8 million. He believes Tesla's stock price may face a risk of decline.
The valuation of Bitcoin is more complex; although experts predict its future price will reach $3.8 million, there are also investors like Warren Buffett who believe that Bitcoin will ultimately go to zero.
Finally, to summarize the future of Bitcoin with the 'Peter Pan Principle'. The reason Bitcoin can continue to rise may be that it has never 'grown up'. Traditional financial instruments are often predictable and dull, while 'alternative currencies' like cryptocurrencies have unlimited potential. As stated in (Peter Pan): 'This world is made of belief, trust, and the magic dust of fairies.' I hope Bitcoin holders can continue to enjoy the promises of government support, but not expect too much in terms of fulfillment.
Article reposted from: Jin Ten Data
