Identifying the determinants of asset prices is one of the most important questions in finance. Traditional asset pricing theories are founded on the idea that equity prices should be determined by fundamentals such as earnings (Gordon 1959, Campbell and Shiller 1988). In contrast, the behavioral finance literature posits that prices do not always follow fundamentals due to investor sentiment trading (Shiller 1981, Baker and Wurgler 2006, Stambaugh et al. 2012). Eventually however, equity prices seem to trace their fundamentals (Pa´stor and Veronesi, 2003, 2006, Bartram and Grinblatt 2018).
It came after the electric car company bought $1.5b (£1.06b) of Bitcoin shares, which in turn sent the market price of both the crypto and Tesla soaring.

In June, the Chinese Government cracked down on considerable crypto mining operations taking place in the Sichuan province and demanded that Chinese banks and payment channels stop supporting decentralised and anonymous crypto transactions.
On Tuesday 9 November, Bitcoin’s price was trading up by roughly 11.5% on the last week after soaring to a new record price of over $68,000 on Tuesday morning.