A dive in Bitcoin’s price this week spilled onto Tesla shares, shaving more than $110 billion off the electric carmaker’s value and some $20 billion from CEO Elon Musk’s net worth while slamming exchange traded funds holding the stock.
Bitcoin slumped as much 17.2 per cent earlier in the day, setting a tone of weakness across cryptocurrency markets as investors exited leveraged bets. It was recently down 10.8 per cent to $48,318 at 13:43 GMT.
Tesla’s shares were down 7.3 per cent to $662.3 as US markets opened. The electric carmaker this month disclosed a $1.5 billion investment in Bitcoin.
The drop in Tesla also hit exchange traded funds (ETFs) such as the ARK Innovation ETF and ARK Autonomous Technology & Robotics ETF, down 8.9% and 7.3%. Both ETFs feature Tesla as their biggest single holding.
A Germany-based trader said he was ‘taking chips off the table’ on Tesla as its $1.5 billion investment in the cryptocurrency could ‘backfire now’.