Bitcoin rose to an all-time high on Tuesday, reaching $ 50,000 at $ 50,602.
Alain Pitton | NurPhoto | Getty Images
Bitcoin slipped on Monday, interrupting its amazing rally after Elon Musk said prices “seem high.”
The world’s most valuable cryptocurrency sank more than 10 percent to $ 51,993 Monday morning, according to Coin Metrics. At one point, Bitcoin fell below the $ 50,000 level, falling to $ 47,700.
It was not immediately clear what was behind the smaller bitcoin movement on Monday. On Saturday, the CEO of Tesla said that the prices of bitcoin and ether of rival symbols seemed excessive. Bitcoin rallied to over $ 58,000 on Sunday, but has since reversed.
Starting at 10:25 a.m. ET, Bitcoin was trading 8% lower at a price of $ 53,375. It is worth noting that price fluctuations of over 10% are not a rarity in crypto. Bitcoin once rose to nearly $ 20,000 in 2017 before losing 80% of its value the following year.
U.S. Treasury Secretary Janet Yellen warned Monday that Bitcoin is an “extremely speculative asset” and said she is worried about investors losing money.
“It’s an extremely inefficient way to conduct transactions, and the amount of energy consumed in processing those transactions is staggering,” said the former Federal Reserve chairman.
Digital currency has grown by more than 80% so far this year. Last week, bitcoin reached a market value of $ 1 trillion for the first time – it has now returned below that mark, according to CoinDesk. The token gained momentum from the news of the big Wall Street banks and Fortune 500 companies that are heating up on cryptocurrencies.
Musk recently came out as a believer in bitcoin, calling it “a good thing” and saying it was “on the verge of gaining widespread acceptance by people in the field of conventional finance.”
Earlier this month, Tesla said it had bought $ 1.5 billion worth of bitcoin and would accept the cryptocurrency as payment for its products. The electric vehicle maker has made paper profits of about $ 1 billion from its investment in bitcoin, according to Dan Ives of Wedbush Securities.
Tesla is “on a trajectory to make more of its Bitcoin investments than the profits from the sale of its EV (electric vehicle) cars throughout 2020,” Ives estimated in a note published on Saturday.
Bitcoin receives attraction from major investors, in part due to the perception that it is a value deposit similar to gold. Bitcoin bulls have tried to argue that investors should add cryptocurrency to their portfolio to hedge against a potential rise in inflation.
But skeptics are not convinced. JPMorgan analysts said in a note last week that bitcoin is an “economic show” and that the rise of digital finance – not bitcoin – is “the real story of the financial transformation of the Covid-19 era.”