A dive in Bitcoin’s price this week spilled onto Tesla shares, shaving more than $110 billion off the electric carmaker’s value and some $20 billion from CEO Elon Musk’s net worth while slamming exchange traded funds holding the stock.

Bitcoin slumped as much 17.2 per cent earlier in the day, setting a tone of weakness across cryptocurrency markets as investors exited leveraged bets. It was recently down 10.8 per cent to $48,318 at 13:43 GMT.

Tesla’s shares were down 7.3 per cent to $662.3 as US markets opened. The electric carmaker this month disclosed a $1.5 billion investment in Bitcoin.

The drop in Tesla also hit exchange traded funds (ETFs) such as the ARK Innovation ETF and ARK Autonomous Technology & Robotics ETF, down 8.9% and 7.3%. Both ETFs feature Tesla as their biggest single holding.

A Germany-based trader said he was ‘taking chips off the table’ on Tesla as its $1.5 billion investment in the cryptocurrency could ‘backfire now’.

The losses come amid a broader market downturn over the last few days that has seen investors sell shares in a wide range of assets that have notched big rallies in recent months, from technology stocks to cannabis and solar ETFs.

The tech-heavy Nasdaq Composite Index was off 2.6 per cent this week, while the Dow and S&P were down 0.7 per cent and 1.8 per cent, respectively. Yields on the benchmark 10-year Treasury stood at 1.3619 per cent after rising nearly 45 basis points this year, a move that has threatened to dim the allure of stocks and other comparatively risky investments.

Some investors, however, may have been preparing for downside in the ARK Innovation ETF. Amy Wu Silverman, equity derivatives strategist at RBC Capital Markets noted a rise in demand for protection against a decline in that ETF.

‘For anyone living under a rock, the ARKK ETF has been the poster child of momentum high fliers and is beloved by retail,’ Silverman wrote.

Meanwhile, the Graniteshares 3X Long Tesla Daily ETP, a levered exchange traded product aimed at tripling the daily moves in Tesla shares, was down more than 32 per cent in London.

While Tesla has long campaigned to cut global auto emissions through use of its relatively environment-friendly cars, Elon Musk’s decision to invest in Bitcoin could weigh on Tesla’s ESG rating, Valentijn van Nieuwenhuijzen, chief investment officer at asset manager NN IP told Reuters on Friday.

Meanwhile, Barclays analysts noted there had been a drop in conversations about the company on Reddit’s WallStreetBets forum, which could explain some of the loss of appetite for the stock.

‘With only 2-3 total submissions on each of the past several days, we remain below the trend in attention that has come along with big returns jumps in the past’, the analysts said in a note.

Tesla remains among the S&P 500 index’s most expensive components, trading at about 163 times its 12-month forward earnings.

While betting on a fall in its value has backfired spectacularly in the past, short interest in Tesla shares still stood at 5.5 per cent, according to Refinitiv data.