Bitcoin fell from $37,156 at 6.30am BST to $34,800 at 2pm BST. This was a fall of over five percent in just a few hours.
Separately the value of Ethereum declined from $2,565 at 6.15am BST to $2,398 at 2pm BST.
Bitcoin has had an unstable 2021 with its value fluctuating between $30,000 and $65,000.
It followed a year of huge growth in the virtual currency’s value in 2020.
Earlier this month the value of Bitcoin, Ethereum and Dogecoin fell sharply following new regulations in China.
Beijing has cracked down on Bitcoin mining after controversy about the amount of electricity it uses.
There is speculation US lawmakers may attempt to impose financial oversight over the unstable market.
Ipek Ozkardeskaya, a senior Swissquote analyst, predicted a busy weekend of crypto trading.
He commented: “Looking at the unrest across the crypto market, there is a chance that we see another hectic weekend trading in Bitcoin and other cryptocurrencies.”
“Cryptocurrency is a good idea on many levels and we believe it has a promising future, but this cannot come at great cost to the environment.
“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to a more sustainable energy.”
Crypto advocates have stepped up their environmental efforts after Mr Musk revealed his concern.
A number of miners have signed up to the Crypto Climate Accord, an effort to make the industry carbon neutral by 2030.
Matt Maley, chief market strategist at Miller Tabak + Co, said: “If the market continues to see wild swings based on Elon Musk tweets, it’s going to be a big set back for this asset class.
“The fact that it sees such wild swings to the tweets from one person takes away the legitimacy of the asset class.”