Tesla founder Elon Musk is no longer the richest person on earth after his stock portfolio tumbled 6 percent on Monday, the largest single-day drop in six months, and slid another 10 percent Tuesday morning as the sell-off worsened, following its months-long rally.
Musk suffered a $30 billion loss of his net worth overnight, primarily due to a broad downturn of tech stocks, including NASDAQ, which fell 2 percent on Monday, and the fall in Bitcoin, whose dollar value recently surged, partly due to Musk's endorsement.
Tesla disclosed, in an SEC filing this month, that it added $1.5 billion in Bitcoin to its balance sheet and planned to accept Bitcoin as payment for its cars and services. The Bitcoin purchase represented some 3 percent of Tesla's cash on hand, as of the end of 2020.
Musk has also taken to Twitter to post positive messages about Bitcoin and other cryptocurrencies, and briefly even added the hashtag #Bitcoin to his Twitter bio last month, pushing the Bitcoin price up 20 percent.
However, central bank regulators are concerned about the unusual promotion of Bitcoin. On Monday, U.S. Treasury Secretary Janet Yellen warned that Bitcoin was an "extremely inefficient way of conducting transactions." Following this, Bitcoin prices tumbled over 16 percent in the afternoon, along with the Tesla shares.
"Musk is now tied to the bitcoin story in the eyes of the [Wall] Street, and although Tesla made a billion paper profit in its first month owning the digital gold, it comes with added risk, as seen this week," wrote Daniel Ives, a Wedbush analyst, as reported by CNBC.
"With Tesla diving into the deep end of the pool on bitcoin, Musk runs the risk that this sideshow can overshadow the fundamental EV vision in the near term for investors," he added.