The move followed skeptical comments from Tesla CEO Elon Musk, Treasury Secretary Janet Yellen and Microsoft (MSFT) co-founder Bill Gates.
Prices stabilized at around $ 48,000 at early trading on Tuesday, but this is still a drop of more than 10% from Monday’s levels.
On Monday, Yellen, former president of the Federal Reserve, also raised some doubts.
Speaking at the New York Times DealBook conference, Yellen said bitcoin is “an extremely inefficient way to trade” and expressed concern about its wild price fluctuations.
“It’s a highly speculative asset and I think people should be wary. It can be extremely volatile and I’m worried about the potential losses that investors in it could suffer,” Yellen said.
Negative comments from Gates didn’t help either.
In an interview with Bloomberg, Gates said that Musk and Tesla have invested in bitcoin, but that does not mean that ordinary investors should follow this direction.
“I think people are bought into these mania, which may not have that much reserve money, so I’m not optimistic about bitcoin,” Gates said.
“My general thought is that if you have less money than Elon, you should probably be careful.”
And if you keep the score at home, everyone except Amazon (AMZN) CEO Jeff Bezos has less money than Elon – including Bill Gates.
It’s also worth noting that Gates, like his good friend Warren Buffett, has been negative with bitcoin for some time – a position that bitcoin investors could have lost on average if they had listened to him.
In fact, Gates said in 2018 that he would shorten bitcoin if there was an easy way to do it. The cryptocurrency was trading at that time for less than $ 10,000.
Despite the recent withdrawal, bitcoin prices are still rising by more than 65% so far in 2021.
This dramatic rise raises alarm bells for many on Wall Street, reminiscent of veteran strategies of previous market bubbles and speculative frenzy.
“While bitcoin has gained significant credibility in recent months due to the interest of institutional investors,” Kristina Hooper, Invesco’s chief global market strategist, said in a report Monday, “it could still be the digital equivalent of “Tulip mania”, which took over the Netherlands in the 1600s and sent the price of tulip bulbs to astronomical and unsustainable highs before their inevitable collapse. ”
