After a tumultuous start to the week, Bitcoin was again under selling pressure on Tuesday, collapsing below a key level of $ 50,000.
In an interview with the New York Times’s Dealbook on Monday, some pointed the finger at Treasury Secretary Janet Yellen, who described Bitcoin as an “inefficient” digital currency and one often used for illegal transactions.
“People should be aware that this can be extremely volatile and I am concerned about the potential losses that investors could suffer,” Yellen said. She also made it clear that her department may be considering bitcoin risks more carefully for investors, and perhaps even regulation.
This is not the first time she has criticized a very popular cryptocurrency and the like. While serving as chair of the Federal Reserve, she called it “extremely speculative.
The price of Bitcoin last fell 10% to $ 48,016, a level it hasn’t touched in about a week, and in the 24-hour range the cryptocurrency ranges between $ 44,964.49 and $ 55,053.91. The effect was felt across a range of cryptocurrencies, with ether, a currency built on top of the ethereum platform, with 15% and XRP, which is pegged to Ripple, down 19%.
Volatility is nothing new for Bitcoin veterans. But this year, Bitcoin has reached new heights, driven by both institutional buying and speculative hype. Tuesday’s losses cut the year-to-date gain to 57%, which is still miles ahead of other assets.
The blame for the recent weakness has also been thrown at weekend tweet Tesla CEO Elon Musk. He responded to Pacific Capital CEO Peter Schiff, who commented
that Bitcoin, ”which is a digital fiat, is even more BS than paper fiat issued by central banks. Gold is not BS. It’s real money and better than both! “
Within that topic, Musk replied that money is “just data that allows us to avoid the inconvenience of exchange.” He then added, “That said: BTC and ETC look high, hahaha.”
Some may have flinched at those words, given that Muska is seen as a fan of cryptocurrencies. Bitcoin enthusiasts cheered and prices soared after the electric car maker announced a $ 1.5 billion investment in Bitcoin earlier this month and said it would accept cryptocurrency payments in the future.
While this sparked some debate about whether it was smart and what it meant for Bitcoin’s status as a legitimate asset, Musk’s company still made a billion dollars from the move.
Neil Wilson, chief market analyst at Markets.com, said Musk’s “too high” comment may have scared some investors, but he thought it was “a joke for followers.
“More importantly, the market is ripe for a sudden technical pull after a parabolic move, a species that usually collapses under its own weight. “There could be a further decline – a 30% reduction, as we had in January this year, would bring prices back to $ 40,000,” he said.
Meanwhile, Tesla shares were under pressure on Tuesday, leading to a drop among technology stocks. That’s after the stock slipped 8% on Monday, down about 21% from a 52-week high, one definition of a bear market.