Tesla and SpaceX founder Elon Musk is no longer the richest person in the world, after losing roughly $ 30 billion of his net worth in a span of less than 24 hours.
According to the Bloomberg Billionaires Index that ranks the 500 richest people in the world, Musk is now worth $ 183 billion. That puts him in second place after Amazon founder Jeff Bezos, whose net worth is roughly $ 186 billion.
The reason Musk lost so much money so quickly was because Tesla’s stock price plummeted rapidly earlier this week. Shares of the electric car maker fell nearly 13% on Tuesday morning after closing 8.5% on Monday. The drop marks the biggest impact Tesla shares have had since last fall, when it closed more than 10% on September 23.
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Musk is notoriously bullish on almost all forms of cryptocurrency, but now that Tesla’s shares are even more tied to Bitcoin’s successes or failures, the volatility of his shares has increased.
According to a recent SEC filing, Musk authorized Tesla to buy $ 1.5 billion worth of Bitcoin in early February to “maximize returns on our cash” and have more flexibility. As of now, about 3% of Tesla’s available cash is converted to Bitcoin.
It appears that the gamble is not yet paying off for Musk, but analysts believe it is. Wedbush securities analyst Daniel Ives told CNBC Money on Tuesday that Tesla is now inextricably linked to the cryptocurrency markets.
“Musk is now tied to the bitcoin story in the eyes of the street and even though Tesla made a billion paper profit in his first month owning the digital gold, it comes with added risk, as seen this week,” he said Ives, adding that he believes that overall it remains “a smart move at the right time for Tesla.”
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Musk has a huge influence on the stock market; You can often cause massive runs or sell-offs of particular stocks with a single tweet to your 47 million+ followers.
Over the past few months, the internet has seen a surge in meme stocks – stocks that an online community, such as Reddit’s retail investor forum, Wall Street Bets, decides to trade mass) and purchases of cryptocurrencies. Another cryptocurrency called Dogecoin was created as a meme coin, but saw a meteoric rise earlier this month because Musk was tweeting about taking the coin’s value “to the moon”, at $ 1 a share (so far, it has hit a maximum of about 7 cents).
The value of Bitcoin is also experiencing a sharp decline; the cryptocurrency fell around 12% on Tuesday. Some index funds are also sinking this week, with the NASDAQ opening 2% lower Tuesday morning.
Despite the recent drop, Tesla shares are still gaining and are up about 317% compared to this time last year.
Read the original story of how Elon Musk lost $ 30 billion overnight and the title of the richest man in the world on TheWrap