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Crypto price crash: Dogecoin, bitcoin, ethereum and cardano all plunge after Elon Musk tweet

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Tesla-Bitcoin (Copyright 2020 The Associated Press. All rights reserved.)
Tesla-Bitcoin (Copyright 2020 The Associated Press. All rights reserved.)

The whole crypto market has crashed after just one tweet from Elon Musk.

The tweet announced that Tesla would no longer be accepting bitcoin in payment for its cars, reversing a recent decision that helped push the price of bitcoin to new heights.

Mr Musk said that the decision had been made because of the vast amount of energy used by bitcoin. He said that he still thought cryptocurrency “is a good idea on many levels”, that Tesla would use bitcoin again if its energy became more clean, and that it would explore other digital currencies – but that for now Tesla would switch back to only taking conventional payments.

It followed other warnings of “caution” from Mr Musk. Before his appearance on Saturday Night Live last week – which appeared to drive up prices of a range of digital currencies, apparently in the hope that Mr Musk would boost them during the show – he advised that people should be careful about their investments.

The announcement immediately led bitcoin to fall. It has now dropped almost 12 per cent over past 24 hours, wiping more than $100 billion off its value.

Watch: What are the risks of investing in cryptocurrency?

Just as notable, however, was how much the announcement seemed to affect other cryptocurrencies. The total market cap of all cryptocurrencies fell more than 10% over Thursday, according to tracking website CoinMarketCap.

Ethereum, for instance, had enjoyed a strong run that had pushed up its value considerably. But it also dropped more than 12 per cent.

Follow live: Cryptocurrency price crash updates

That did not entirely erase its recent gains – it is still up 8 per cent over the last week – but meant its price took a considerable hit.

Dogecoin also dropped rapidly, presumably in part because Mr Musk has until now been a cheerleader for the currency. It has fallen 20 per cent over the last 24 hours, and 34 per cent in the last week – especially dramatic after a gradual increase that had seen it outpace bitcoin’s growth by more than 100 times over 2021.

The only major cryptocurrency to see gains over the day was cardano, which is up 8.6 per cent over the last week. Those gains continued over Thursday, which saw it up more than 10 per cent; though it too had dropped immediately in the wake of Mr Musk’s post, it quickly recovered.

Watch: What is bitcoin?

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