Investors had rushed out of cryptocurrency earlier in the day 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.
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.
Like Nigeria, China has banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies.
China’s announcement on Tuesday reiterated a prior ban on financial institutions and payment companies from handling cryptocurrency transactions. China also warned investors against speculative crypto trading.
Meanwhile Tesla CEO, 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, 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.