Bitcoin bounces after Jack Dorsey invests $170m

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E.lon Musk is no longer the richest man in the world after Tesla shares slumped this week and wiped more than $ 15 billion (£ 11 billion) off his net worth.

The electric car company’s shares fell 13 percentage points to $ 619 in New York on a wild day on fears the tech bubble could burst. Tesla’s performance was hurt by a $ 1.5 billion bet made earlier this year on the digital currency Bitcoin, which itself gained 17 percentage points to $ 45,393 before yesterday pulling back some of that lost ground to at $ 46,822 to trade.

The losses were fueled in part by comments from Mr Musk on Twitter over the weekend that prices for Bitcoin and rival Ether “appear to be high”.

Mr Musk’s paper losses due to his 21 percent stake in Tesla put the 49-year-old in second place in the Bloomberg Billionaire Index behind Amazon boss Jeff Bezos. Mr Musk is valued at $ 183 billion, down from a January high of $ 210 billion. According to Dan Ives of investment firm Wedbush, Tesla’s recent slump is partly due to its close relationship with Bitcoin. He said, “Perception is a reality on the street and as Musk and Tesla aggressively embrace Bitcoin, investors are starting to tie Bitcoin and Tesla on their hip.”

While Tesla was hit hard, it wasn’t the only tech stock to suffer. The Nasdaq fell as much as 3 percentage points, although it eased losses later in the day after Fed Chairman Jerome Powell raised fears that interest rates could rise to cool an overheated economy. Joe Biden’s plan to increase fiscal support has fueled inflation concerns.

Meanwhile, Square, the U.S. fintech company founded by Twitter’s Jack Dorsey, said last night it invested $ 170 million in Bitcoin, another investment after a $ 50 million purchase last year. This makes Square one of the largest corporate cryptocurrency holders alongside Tesla.

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