NEW YORK / LONDON (Reuters) – Bitcoin fell on Monday after hitting its last record high a day earlier as global stock sales lowered risk appetite, with some investors also citing growth concerns rapid rise in the price of virtual currency.
Traders also pointed out the development of extremely long leveraged positions in cryptocurrency.
The most popular cryptocurrency fell to $ 47,400, a one-week low. At one point, it lost almost 17% of its value or about $ 160 billion was removed from its total market capitalization. Its market cap fell to $ 983 billion on Monday, reaching more than $ 1 trillion on Friday.
Bitcoin fell 7.4% last time to $ 53,385.
Bitcoin rallied to a high of $ 58,354 on Sunday, and its latest episode of price movements over the weekend brought its gains so far this year to almost 100%.
Tesla chief Elon Musk, whose tweets on bitcoin added fuel to the cryptocurrency rally, said on Saturday that the price of bitcoin and ethereum seemed high.
Bitcoin has grown by more than 80% this year. Since reaching a low in March below $ 4,000, bitcoin has risen nearly 1,200%.
U.S. Treasury Secretary Janet Yellen added fuel on Monday, saying bitcoin is extremely inefficient in transactions and an extremely speculative asset.
“The general sale this week is a result of easing last week’s exuberance, as well as much-needed deployment of long over-leveraged positions,” said Ross Middleton, co-founder of cryptocurrency exchange DeversiFi.
The rival cryptocurrency ethereum, which tends to move in tandem with bitcoin, also fell after hitting a record high on Saturday. On Monday, it hit a three-week low and fell 10 percent to $ 1,743.
The meteoric rise of Bitcoin to over $ 50,000 has been fueled by signs that it is gaining acceptance among investors and mass companies, from Tesla Inc and Mastercard Inc to BNY Mellon.
“We tend to believe that there is a good chance of a week of downturn and a small correction, although it does not do much to provide medium-term prospects,” said Joseph Edwards of Enigma Securities, a cryptocurrency brokerage in London.
Reporting by Gertrude Chavez-Dreyfuss in New York and Tom Wilson in London; Edited by Andrew Cawthorne