At 11am, Bitcoin was priced at $39,416. Musk tweeted at 12.07 and by 3.13pm it had dropped to $38,532 – a drop of over 1.5 percent.
1.63 percent drop in just over an hour. Ethereum fell 2.2 percent from $2,442 to $2,388 during the same period. And meme coin Dogecoin fell from a high of $0.314 at 8.15am to a low of $0.307 at 3.15pm.
The drop in prices for the cryptocurrencies comes after Elon Musk responded to reports Bitcoin is “greener” than critics say.
The entrepreneur and business magnate hit back at Jesse Powell, chief executive of the Kraken crypto exchange, who said bitcoin is “a lot greener than people give it credit for”.
Mr Powell told Bloomberg TV on Thursday that Musk has got “some more studying to do on this topic.”
Responding to the statement on Twitter, Musk said: “Based on what data?”
The comment by the Tesla CEO has reignited his argument that Bitcoin is environmentally damaging due to the “insane” energy use required for the computing work that secures the network and creates new coins.
Last month, Mr Musk said his car company would stop accepting Bitcoin as a payment for its products due to concerns over how cryptocurrency mining contributes to climate change.
He said in a statement: “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
The announcement triggered a sharp fall in the price of Bitcoin.
On Sunday Mr Must said Tesla will resume Bitcoin transactions once it confirms there is reasonable clean energy usage by miners.
He said in a Tweet: “When there’s confirmation of reasonable (-50 percent) clean energy usage by miners with positive future trend, Tesla will resume allowing bitcoin transactions.”
Mr Musk’s comments on social media about cryptocurrency often send prices soaring or plummeting.
It comes as new data suggests 2.3 million adults are estimated to hold cryptocurrencies, up from 1.8 million last year, according to the City regulator.
While ownership of cryptocurrencies has increased, understanding of them appears to have decreased, according to the findings from the Financial Conduct Authority (FCA).
It has warned that investing in cryptocurrencies is high risk and investors should be prepared to lose all their money.
People have around £300 invested on average.
The FCA cryptocurrencies can take many forms and some include Bitcoin and Ripple.
Earlier this month El Salvador announced it will become the first country to accept Bitcoin as legal tender.
It plans to use the virtual currency alongside the US dollar.
However the World Bank has turned down a request from El Salvador for help setting this up.
A spokesperson explained: “We are committed to helping El Salvador in numerous ways including for currency transparency and regulatory processes.
“While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings.”
Under new legislation every business in El Salvador will be required to accept Bitcoin as legal tender, unless it is unable to do so for technological reasons.
The proposal, originally made by president Nayib Bukele, has been approved by congress.
However Bank of England governor Andrew Bailey warned of “tough love” as cryptocurrency regulations are strengthened.
He said: “What we cannot have is a world where innovation gets a free pass to ignore the public interest.
“The odds of such an approach not ending well are too high.”
Last month Mr Bailey branded cryptocurrencies “dangerous” and said investors should “buy them only if you’re prepared to lose all your money”.