Tesla and SpaceX founder Elon Musk is no longer the richest person in the world, after losing about $ 30 billion of his net worth in less than 24 hours.
According to the Bloomberg Billionaire Index, which ranks the world’s 500 richest people, Musk is now worth $ 183 billion. This puts him in second place, behind Amazon founder Jeff Bezos, whose net worth is approximately $ 186 billion.
The reason Musk lost so much money so quickly was because Tesla’s stock price plummeted earlier this week. The automaker’s shares fell nearly 13% on Tuesday morning, after closing 8.5% on Monday. The fall marks the biggest blow Tesla’s shares have had since last fall, when they closed at more than a 10% drop on September 23.
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Musk is notoriously optimistic in almost all forms of cryptocurrency, but now that Tesla’s shares are even more linked to Bitcoin’s successes or failures, its stock volatility has increased.
According to a recent SEC filing, Musk authorized Tesla to buy $ 1.5 billion in Bitcoin in early February to “maximize the return on our cash” and have more flexibility. As of now, about 3% of Tesla’s cash is converted into Bitcoin.
The bet is still not paying off for Musk, it seems – but analysts think so. Wedbush Securities analyst Daniel Ives told CNBC Money on Tuesday that Tesla is now inextricably linked to the cryptocurrency markets.
“Musk is now linked to the history of bitcoin in the eyes of the street and, although Tesla made a profit of a billion papers in its first month owning digital gold, it comes with an additional risk, as seen this week,” he said. Ives, adding that he thinks that overall it is still “a smart move at the right time for Tesla”.
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Musk has an extraordinary influence on the stock market; it can often cause runs or mass sales of specific stocks with a single tweet to its more than 47 million followers.
Over the past few months, the Internet has seen an increase in meme stocks (actions that an online community, such as Reddit’s retail investor forum, Wall Street Bets, decided to trade in large scale) and cryptocurrency purchases. Another cryptocurrency called Dogecoin was created as a meme currency, but experienced a meteoric rise earlier this month because Musk was tweeting about bringing the coin’s value “to the moon” at $ 1 per share (so far, it has peaked at about 7 cents).
Bitcoin’s value is also falling sharply; cryptocurrency fell about 12% on Tuesday. Some index funds are also sinking this week, and the NASDAQ opened 2% cheaper on Tuesday morning.
Despite the recent fall, Tesla’s shares are still going up and up about 317% compared to last year.