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Elon Musk's tweet on Bitcoin costs him $15 billion in a day, here is what we know

Elon Musk's tweets in support of Bitcoin and Dogecoin along with Tesla's investment have boosted the prices of major cryptocurrencies in the past few weeks, However, one of his recent tweets have cost Musk a whopping $15.2 billion in a day.

twitter-logoManas Tiwari | February 23, 2021 | Updated 10:16 IST
Elon Musk and Bitcoin
Only two weeks ago Elon Musk’s Tesla had invested $1.5 billion in Bitcoin.

Highlights

  • Bitcoin value crashed on Monday.
  • Elon Musk lost $15 Billion.
  • Musk's tweet may have led to crash.

Elon Musk has been one of the biggest supporters of cryptocurrency. Tesla chief's tweets in support of Bitcoin and Dogecoin along with Tesla's investment have boosted the prices of major cryptocurrencies in the past few weeks, However, one of his recent tweets have cost Musk a whopping $15.2 billion in a day. This happened as Tesla Inc. shares slid 8.6% on Monday, wiping Musk's wealth, who is no longer the world's richest man.

The sharp decline in Tesla shares happened after Musk's comments over the weekend that the prices of Bitcoin and smaller rival Ether "do seem high." The tweet came just two weeks after Tesla had added $1.5 billion in Bitcoin to its balance sheet. The company had also announced that it is ready to accept cryptocurrency as a means of payment for its electric cars.

Tesla investment and Bitcoin rise

Only two weeks ago Elon Musk's Tesla had invested $1.5 billion in Bitcoin. It is also believed that Musk acquired 43,000 bitcoins during various operations in January. The transaction raised company's market value above one trillion dollars for the first time. There was a massive jump in Bitcoin prices as well. The cryptocurrency crossed the $58,000 per unit value for the first time on Sunday night. This is almost double the $29,000 it cost on January 27, its lowest price so far this year.

Tables turned on February 22. On Monday, there was a sharp decline of between 8 to 10 per cent in Bitcoin value. This brought the value down to $53,000. With this, Musk has dropped to the second spot on the Bloomberg Billionaires Index of the world's 500 richest people with a net worth of $183.4 billion. Amazon.com Inc. founder Jeff Bezos reclaimed the top spot even as his fortune fell by $3.7 billion to $186.3 billion.

Elon Musk's role in decline

Elon Musk has a history of putting out tweets that have far reaching impact. He is also known to reply to users with cryptic tweets. Something similar happened over the weekend. On Friday, a user rebuked Musk for his stance on the cryptocurrency. The user quoted a remark made by Musk last December.

"According to Elon Musk 'Bitcoin is almost as much of a hoax as fiat money.' So Musk considers both Bitcoin and fiat money to be bullshit. I agree, I just think that Bitcoin, which is a digital fiat currency, is even more nonsense than the paper fiat currency issued by central banks. Gold is not silly. It's real money and better than both!" Economist and market strategist Peter Schiff tweeted.

For those unaware, Fiat money is not based on the value of precious metals but a general belief that it has value. To this, Musk responded:

"An email that says you have gold is not the same as having gold. You could also have cryptocurrencies. Money is just a piece of information that allows us to avoid the inconvenience of bartering. That data, like all data, is subject to latency and error. The system will evolve toward that which minimizes both."

He did not stop here. Musk attached another tweet to the last one which read: "That said, BTC and ETH (bitcoin and ethereum) seem to be high." This is the tweet which is believed to have caused the Bitcoin crash. For all we know this might just be a temporary fall and Bitcoin may recover over the next few days a trend we have witnessed over the past few months.

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