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Elon Musk loses $19b after bitcoin and Tesla shares plunge

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Global investors, fearing an overvalued market, have dumped high-flying tech stocks and bitcoin once again.

The slump in bitcoin’s value (from record high levels), along with Tesla’s falling share price, have shaved $US15.2 billion ($19.2 billion) off Elon Musk’s net worth, causing him to lose his title as the “world’s richest person”.

Once again, Amazon founder Jeff Bezos has reclaimed his crown as the wealthiest man.

The two billionaires have swapped between first and second place since January.

Mr Musk’s downgrade on the rich list was, in part, due to his tweets over the weekend that the price of cryptocurrencies bitcoin and ethereum “do seem high lol”.

He is now ranked second on Bloomberg’s Billionaires Index, with a net worth of $US183.4 billion, down from a peak of $US210 billion in January.

Mr Bezos is worth slightly more at $US186 billion, even though the Amazon boss’s fortune dropped $US3.7 billion.

Forbes also has its own rich list with slightly different numbers.

Mr Bezos is at the top of that list ($US186.9b), with Mr Musk a distant second ($US166.1b).

The Tesla CEO’s comments about the “high” price of bitcoin came two weeks after his electric car company said it had invested $US1.5 billion in the volatile digital currency, and would accept it as a payment method in the “near future”.

Bitcoin hit a record high of $US58,354 on Monday, having surged more than 400 per cent in the past year.

But overnight, the cryptocurrency suffered its biggest daily drop in a month, falling to as low as $US45,000 on scepticism about its “sky high” valuations.

Mr Musk’s net worth is heavily tied to his electric vehicle company’s share price

Tesla shares plummeted by as much as 13 per cent overnight, but trimmed their losses to just 2.2 per cent by the time Wall Street finished trading.

This was on top of Tesla’s 9 per cent slump yesterday.

Bitcoin is both a “friend and foe” for the Tesla boss, Wedbush Securities analyst Daniel Ives said.

“While Tesla on paper made roughly $US1 billion on bitcoin in a month that exceeded all its EV [electric vehicle] profits from 2020, the recent 48 hour sell off in bitcoin and added volatility has driven some investors to the exits on this name in the near-term,” he said.

“We continue to believe the bitcoin move was a strategic one for the long-term and will have a ripple impact as Square, Mastercard, Microstrategy and now Tesla embrace bitcoin.”

Overnight, the payment platform company Square said it bought an extra $US170 million worth of bitcoin. That was on top of its $US150 million purchase in October last year.

FORBES.COM

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