Musk is no longer the world’s richest as his tweet wipes off $15.2b overnight

In a dramatic reversal of fortune triggered by a tweet, the world’s richest man Elon Musk lost that crown overnight after Tesla Inc. shares slid 8.6 per cent on Monday, wiping $15.2 billion from his net worth.

Tesla's biggest decline since September was fuelled in part by Musk's comments over the weekend that the prices of Bitcoin and smaller rival Ether "do seem high". His tweet came two weeks after Tesla announced it added $1.5 billion in Bitcoin to its balance sheet.

In the wake of the tweet, the cryptocurrency, which has surged more than 400 per cent over the past year, also tumbled for a second day on Tuesday on skepticism over the durability of its rally.

Bitcoin was down 15 per cent on Tuesday and traded around $46,000. While the selloff only puts Bitcoin prices at the lowest in about two weeks, investors will be wondering whether it marks the start of a bigger retreat from crypto or simply represents the volatility in an unpredictable market.

Bitcoin has been battered by negative comments this week, with long-time sceptic and now Treasury Secretary Janet Yellen saying at a New York Times conference on Monday that the token is an “extremely inefficient way of conducting transactions.”

Musk also tweeted earlier Monday that the company's Model Y Standard Range SUV would still be available "off the menu," backing up reports from electric vehicle news site Electrek that the model had been removed from its online configurator.

Musk dropped to the second position on the Bloomberg Billionaires Index of the world's 500 richest people with a net worth of $183.4 billion — down from a peak of $210 billion in January. Amazon founder Jeff Bezos reclaimed the top spot even as his fortune fell by $3.7 billion to $186.3 billion Monday.

The two billionaires have been swapping places since January as the value of Tesla fluctuated. The stock surged as much as 25 per cent to start 2021 before wiping off almost all of this year's gain. Musk briefly overtook Bezos after his rocket company SpaceX raised $850 million earlier this month, valuing the company at $74 billion, a 60 per cent jump from August.

In Bitcoin’s fall, Microsoft Corp co-founder Bill Gates also weighed in. In an interview with Bloomberg Television’s Emily Chang, the billionaire said he’s not a fan of Bitcoin and warned against retail investors being swept up in speculative manias.

“It’s a purely speculative asset,” said Nader Naeimi, head of dynamic markets at AMP Capital Investors in Sydney.

At a technical level, Bitcoin looks stretched, according to Miller Tabak + Co. A monthly relative-strength index is “extremely overbought,” chief market strategist Matt Maley wrote in a weekend note.

Bitcoin prices have soared more than 50 per cent this year as more investors buy in to the argument that digital currencies can act as a hedge against inflation.

— issacjohn@khaleejtimes.com