Bitcoin’s gains had recently reached new highs after Tesla announced two weeks ago that it had added $ 1.5 billion in Bitcoin to its balance sheet.
Shares of Tesla Inc. wiped out gains since the start of the year on Tuesday and traded below where they were when the electric car maker entered the S&P 500 index in December.
The stock fell 12% to $ 627.10 in New York on Tuesday, its biggest intraday decline since September 8, after falling 8.6% on Monday. The stock is now down 30% from its record intraday high on Jan.25.
Tesla’s decline at the start of the week amid a broader market liquidation was fueled in part by comments from CEO Elon Musk over the weekend that the prices of Bitcoin and smaller rival Ether “appear high “.
Concerns over the cryptocurrency’s value helped erase some of Bitcoin’s gains, which reached new highs after Tesla announced two weeks ago that it had added $ 1.5 billion in Bitcoin to his record.
Shares of smaller electric vehicles, which typically take Tesla inspiration, also fell sharply on Tuesday. The frenzied rally of many die-hard electric vehicle makers slowed down considerably in 2021, as investors wary of growing competition from traditional automakers, such as General Motors Co. and Ford Motor Co.