According to the Bloomberg Billionaires Index, in the last 24 hours Elon Musk lost US$12.5 billion ($17.41 billion), Jeff Bezos lost US$9.17 billion ($12.78 billion) and Facebook – now Meta – CEO Mark Zuckerberg lost US$4.86 billion ($6.77 billion).
During one day, Changpeng Zhao, CEO of Binance, lost an eye-watering US$13.3 billion ($18.53 billion).
There are two primary factors behind these price drops: investors are fearful of interest rate hikes in the US, and the entire cryptocurrency market is falling due to the same concern.
Considering that the wealthiest people in the world are almost entirely based on assets – Mr Musk does not possess a bank account totalling more than US$240 billion – such changes in the market are likely to have a negative impact on ranking on the world’s wealthiest people list.
Since its all-time high in November, Bitcoin has lost almost 50 per cent of its value and the cryptocurrency market as a whole has wiped more than $1.4 trillion in value.
Government policy is another thorn in the side of digital currency proponents. Three days ago, Russia’s central bank proposed a ban on cryptocurrency mining on Russian soil.
Arguing that mining cryptocurrency (a complex algorithm-crunching process that involves huge computing power) threatened the financial stability of Russia, the central bank accused some cryptocurrencies as resembling pyramid schemes.
eToro’s Simon Peters said a ban on cryptocurrency mining in Russia would likely affect prices only in the short-term.
“Russia imposing a blanket ban on bitcoin mining may well have an impact on its hashrate and price in the short term. However, I don’t believe this will be a long-term headwind,” Mr Peters said.
“Russia is only responsible for approximately 11 per cent of the global hashrate. This is in stark comparison to China, which when it banned Bitcoin mining in May 2021, the mining operations based there accounted for 60–70 per cent of the global hashrate of the Bitcoin network.
“When these China-based miners went offline due to the ban, the hashrate dropped significantly along with price.
“But, as those miners set up in other countries/jurisdictions the hashrate rebounded and is now at an all-time high.
“If Russia does ban Bitcoin mining we may well see a similar pattern, but to a far lesser extent.”