Bitcoin Drops 17% After Elon Musk’s Comment On Valuation

Bitcoin, world’s biggest cryptocurrency, plummeted as much as 17 per cent on Tuesday, with prices tumbling below $50,000 as investors raised concerns over its sky-high valuation

Bitcoin has been on a tear in recent times, buoyed by acceptance among mainstream investors and companies, such as Tesla Inc, Mastercard Inc and BNY Mellon.

However, top investor and Tesla CEO, Elon Musk’s comments over the weekend saying the prices of Bitcoin and Ether “seem high” were viewed as the initial catalyst for the selloff.

Elon Musk lost his place as the world’s richest person after Tesla shares slid 8.6 per cent, this is coming two weeks after Tesla announced it added $1.5 billion in Bitcoin to its balance sheet.

The fall in Tesla shares wiped out a whopping $15.2 billion from Musk’s net worth after a plunge in the value of Bitcoin. This is the biggest decline in Tesla’s value since September.

Also, Ether, the world’s second largest cryptocurrency by market capitalisation, that often moves in tandem with bitcoin, also dropped more than 20 per cent to $1,410, down over 30 per cent from last week’s record peak.