Elon Musk, who briefly became the world's first trillionaire earlier this year, is witnessing one of the sharpest wealth declines ever recorded. The Tesla and SpaceX CEO's net worth has now fallen below $700 billion, driven by a prolonged selloff in SpaceX shares and continued weakness in Tesla stock.According to the Bloomberg Billionaires Index, Musk's fortune has dropped to $695.7 billion, marking the first time it has fallen below the $700 billion mark since December 2025. While he remains the world's richest person by a wide margin, he has lost more than $750 billion from his peak wealth of $1.45 trillion reached on June 16.Elon Musk loses more than $20 billion in a dayMusk's fortune declined by more than $20 billion on Monday after SpaceX shares slid another 4.8% to around $109.50. The stock has now plunged nearly 50% since mid-June, wiping out more than $1 trillion in the company's market value, according to Forbes.The latest decline follows an aborted Starship launch on July 16, which accelerated the selloff and pushed Musk's wealth below $800 billion. Although SpaceX later completed a successful Starship test launch, investor sentiment has remained cautious.Reflecting on the dramatic reversal, Musk even described himself as a "Former trillionaire" in a post on X last week.Why is Elon Musk's net worth falling?The biggest factor behind Musk's shrinking fortune is the sharp decline in SpaceX, where he owns approximately 42% of the company.Earlier, SpaceX had climbed into the ranks of the world's most valuable companies following its listing. However, the recent correction has pushed the company down to the ninth spot, with its market capitalization falling to around $1.515 trillion after a 2.68% drop in shares.The decline has been severe over the past month, with SpaceX shares losing between 41% and 45%, erasing more than $1 trillion in market value.Another factor weighing on Musk's fortune is Tesla. The electric vehicle maker's shares have also come under heavy pressure after disappointing quarterly earnings.Tesla reported $28.24 billion in second-quarter revenue, but adjusted earnings of $0.33 per share missed Wall Street estimates by nearly 39%. The company also swung to negative $1.09 billion in free cash flow as capital spending surged.Tesla stock closed at $313.03 on July 24, down 17.81% for the week and more than 30% year-to-date. Its market capitalization has slipped to roughly $1.236 trillion, pushing the company out of the world's 10 most valuable firms to 11th place.Adding to investor concerns, Tesla CFO Vaibhav Taneja said the company expects capital expenditure to increase further during the second half of 2026. Tesla plans to spend more than $25 billion this year while securing debt facilities worth up to $30 billion.Who are the world's richest people?Despite the recent losses, Musk remains comfortably ahead in the global wealth rankings.According to the Bloomberg Billionaires Index:Elon Musk: $695.7 billionLarry Page: $276 billionSergey Brin: $256 billionJeff Bezos: $255 billionMichael Dell: $225 billionMark Zuckerberg: $212 billionJensen Huang: $171 billionLarry Ellison: $166 billionBernard Arnault: $154 billionWarren Buffett: $141 billionAmong Indian billionaires, Gautam Adani ranks 17th globally with a net worth of $113 billion, while Mukesh Ambani is 23rd with $83.5 billion.