Elon Musk’s ‘diamond hands’ Tesla tweet stems crypto price plunge amid dramatic collapse

Bitcoin and ethereum experienced a slight boost, but regulation from China has caused the market to collapse

El CEO de Tesla, Elon Musk, habla durante la presentación del nuevo Tesla Model Y en Hawthorne, California, el 14 de marzo de 2019. (AFP via Getty Images)

Elon Musk’s short tweet that Tesla will be holding its cryptocurrency has boosted the market - marginally - as it suffers a greater crash.

At 3.42pm UK time, Mr Musk tweeted that Tesla had “diamond hands”, using the emoji to signify when a cryptocurrency holder refuses to sell their digital coin.

Coindesk, a cryptocurrency price tracker, shows that bitcoin prices spiked slightly - from $34,923.80 to $37,172.91 in little over 15 minutes.

Ethereum also experienced a slight increase from $2,388 to $2,573 in the immediate aftermath of the post.

Mr Musk’s tweet comes as bitcoin, Ethereum, Dogecoin, and more digital currencies have dramatically dropped in price following new regulation from China.

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Bitcoin lost 25 per cent of its value, and other currencies including Ethereum, Cardano, Dogecoin, and more followed suit.

More than $250 billion of cryptocurrency has been traded over the last 24 hours, as users attempted to sell their holdings to alleviate prospective losses. Dogecoin had dropped 30 per cent, and Cardano fell more than 25 per cent.

Almost all altcoins, or bitcoin alternatives, suffered far more than bitcoin itself. Many were down more than a third, with smaller coins being hit harder than larger ones.

The crash stems from three Chinese state-backed organisations – including the China Banking Association – had issued a warning that digital currencies are not “real”, and that they “should not and cannot be used as currency in the market”.

The statement also said that the “speculation activities” that have surrounded virtual currencies were putting people’s property and the “normal order of economy and finance” at risk.

Binance and Coinbase, as well as exchanges Gemini and KuCoin, experienced crashes, as did trackers Coindesk and CoinMarketCap for a brief spell.

Mr Musk had recently caused a smaller cryptocurrency crash after he announced that his electric car companywould not be accepting payment in cryptocurrency, causing a smaller crash in the market.

The news came mere months after he had encouraged people to purchase vehicles with bitcoin, and said that he would launch a Doge-1 satellite to put the “first crypto in space” and the “first meme in space”.