Nobel laureate in economics: Tesla is more similar to Bitcoin than you think

In November 2021 (Azer 1400), the value of Tesla stock reached its highest level at the same time as Bitcoin and increased more than 13 times and fell in a similar trend. Now, Nobel laureate economist Paul Groman believes that the foundation of both these assets depends only on the emotions and faith of their investors.

To the report Bitcoin.com, Paul Gruman, who won the National Bank of Sweden’s Nobel Prize for Economic Sciences in 2008 (1387) for his analysis of the relationship between trading patterns and the place of economic activity; On Tuesday, he opined on Tesla, Bitcoin and their valuation in a New York Times op-ed.

He wrote:

Tesla may be more similar to Bitcoin than you think

The economist explained that big companies like Apple, Microsoft and Amazon have maintained their market dominance because they benefit from a powerful network of economic spillovers. In other words, the demand for a product depends on the demand of others who buy that product.

Grokman explained:

However, it is hard to understand what has given Tesla such power to dominate the electric car business. Where does the powerful network of side effects form in the electric car business?

In response to this question, he said:

Electric car production does not seem to be a side effect network business.

Grokman continued:

It’s hard to tell if the market’s high valuation of Tesla is due to its pre-decline price or its current value.

The Nobel laureate explained why stocks have been so valuable so far. He believes that the reason for this is the existence of investors who fell in love with the story of a brilliant and cool innovator; Even against the strong argument that this man was an innovator. Grockman added that if Elon Musk was who he seems, he should be able to build a long-lived money machine.

He noted:

Tesla’s sales certainly depend in part on the mentality that the mask itself is the cool guy.

Describing the similarities between Tesla and Bitcoin, the Nobel Prize-winning economist explained:

Despite years of effort, no one has yet been able to find a serious use for digital currencies other than money laundering. However, prices have risen due to market hype and are still supported by a group of true and die-hard believers.

Krugman concluded:

Certainly something similar has happened with Tesla, even though the company actually makes valuable products.

At the time of writing this report, Tesla’s stock price has fallen by 70% since the beginning of the year, while the price of Bitcoin has seen its value fall by 65%.