Bitcoin has rallied after plunging below the $40,000 mark for the first time in more than three months, as Tesla boss Elon Musk insists the company will not sell any of its holdings in the cryptocurrency.
Despite the turbulence, celebrities and others who bought in early are still up big – but small investors who jumped on the Bitcoin trend in the past few months may have suffered ruinous losses.
Investors had rushed out of cryptocurrency earlier Wednesday after China sparked a market panic when officials announced a regulatory crackdown. Bitcoin dropped as low as $30,201.96 – down as much as 30 percent before it retraced most of its losses after Musk’s vote of confidence.
By late afternoon trade in New York, the currency was still down about 10 percent on the day, but was well off its earlier lows.
Shoring up the market amid turbulence, Musk indicated the company would not sell any of its Bitcoin holdings, tweeting on Wednesday morning: ‘Tesla has [diamond hands]’.
‘Diamond hands’ is slang popularized by the Reddit forum WallStreetBets, nadex binary options spreads indicating a refusal to sell even in the face of falling prices.Tesla stock was down 2.6 percent in afternoon trading.
Tesla holds roughly 38,700 Bitcoins at an average purchase price of $34,700, according to a DailyMail.com analysis of the company’s public statements, meaning the company’s investment was worth $1.56 billion at Wednesday’s prices.
That means even after the topsy-turvy markets of Wednesday, Tesla still has a gain of more than $200 million.
In the earlier sell-off, cryptocurrencies across the board were hit, and technology platforms that host the digital assets’ trading and other related functions reported being down and, in some cases even suspending withdrawals, adding to the negative tone in markets.
People on Reddit trading boards described losing their shirts and some people even posted telephone numbers for a suicide help line in case the losses led to hopeless feelings.
Bitcoin rallied on Wednesday after plunging below the $40,000 mark for the first time in more than three months
Tesla boss Elon Musk insists the company will not sell any of its holdings in the cryptocurrency
Musk suggested Tesla will not sell its Bitcoin, using the internet slang ‘diamond hands’