Bitcoin and Tesla (TSLA): What do these meme investments have in common?

Bitcoin and Tesla. At face value, these two things have almost nothing in common. One is a blockchain-based cryptocurrency (cryptoasset?) and Central-Bank-replacement-hopeful. The other is a burgeoning maker of electric vehicles and energy-company-hopeful. And yet, they share much of the same space riding the retail investing airwaves and Twitter memes.

I’m not kidding — Fox Business this week literally did a segment asking a couple interviewees to fight over which of the two investments would be the better buy. If you want to feel tempted to go full Michael Burry and short the entire market, watch this video with Ross Gerber and Isaiah Jackson.

Obviously one component to this is just the volatility. If there are any “get rich quick” /r/wallstreetbets investments on the market today, it’s these two. The conversation takes an interesting turn toward the end, though, with a note about something that ties the two entities together: energy.

Bitcoin mining consumes a lot of energy. It’s the secret sauce that makes Bitcoin worth anything at all: It takes a ton of electricity to keep Bitcoin running and secure without the trust of third-parties. It consumes as much electricity as small countries. That expensive process naturally seeks cheap energy that is otherwise wasted. It could also help propagate many green energy technologies by making energy useful and profitable to put to work no matter where it is. Tesla is at the forefront of revolutionizing the way we capture and use renewable resources. In the future, entire farms of Bitcoin mining rigs could easily be powered by Tesla Solar and Tesla Powerpacks.

There’s also the whole Elon situation. For those that don’t know, Elon is not new to the idea of internet money. He started PayPal, and its predecessor He originally envisioned PayPal to be much more than the internet dollar-mover that it is today. He’s jokingly called the CEO of Dogecoin (a meme cryptocurrency that recently jumped in value when Musk tweeted about it).

And most recently, he’s started to take an interest in Bitcoin, if only a subtle one. If he’s tweeting this, I’d bet Bitcoin is already on the Tesla balance sheet to some degree. We’ll have to wait and see if I’m right with the next round of disclosures.

But that doesn’t really answer why these two investments share a lot of the same kind of interest. Personally, I think the answer there is really simple: They’re both living at the intersection of (hype and irrationality) and (genuinely revolutionary technology that could change the world). They’re both cults, but in both cases there’s a sense that we may one day see their followers as justified in their devotion.

Tesla as of today is not much more than a car company — one that, frankly, doesn’t make (much) money. But it’s readily apparent to many that it’s going to revolutionize not just the car industry but the energy industry, hence its lofty valuation. Bitcoin is just a digital currency — one that, frankly, isn’t very useful. But its disciples believe, and early evidence suggests, it could fundamentally transform not just the way we exchange dollars, but money itself.

Show More Comments