Bitcoin climbed Tuesday to an all-time high reaching the $ 50,000 milestone at $ 50.602.
Alain Pitton | NurPhoto | Getty Images
Bitcoin slipped Monday, halting its phenomenal rally after Elon Musk said prices “look high.”
The world’s most valuable cryptocurrency fell above 10% to a price of $ 51,993 on Monday morning, according to data from Coin Metrics. At one point, bitcoin had plunged below the $ 50,000 level, falling as low as $ 47,700.
It was not immediately clear what was behind the lower bitcoin movement on Monday. On Saturday, the Tesla CEO said bitcoin prices and rival token ether looked excessive. Bitcoin raised more than $ 58,000 on Sunday, but has since rebounded.
As of 12:00 ET, bitcoin was trading more than 8% lower at $ 53,195. It is worth noting that price movements above 10% are not very rare in crypto. Bitcoin once climbed to nearly $ 20,000 in 2017 before stripping up 80% of its value the following year.
U.S. Treasury Secretary Janet Yellen on Monday warned that bitcoin was a “highly speculative asset” and said she was concerned about investors losing their money.
“It’s a very inefficient way of doing things, and the amount of energy spent in processing those things is staggering,” said the former chairman of the Federal Reserve.
The digital coin is still up more than 80% so far this year. Last week, bitcoin hit $ 1 trillion in market value for the first time – it is now back below that mark, according to CoinDesk. The token has been boosted by news of major Wall Street Banks and Fortune 500 companies warming to cryptocurrencies.
Musk has recently come out as a believer in bitcoin, saying it’s a “good thing” and saying he thinks it’s “on track to be widely accepted by ordinary financial people.” . “
Earlier this month, Tesla said it bought $ 1.5 billion worth of bitcoin and would accept crypto as payment for its products. The electric vehicle maker made about $ 1 billion in paper profits from its bitcoin investment, according to Wedbush Securities ’Dan Ives.
Tesla is “on track to make more from its Bitcoin investments than the profits from selling its EV (electric vehicle) cars in all of 2020,” Ives estimated in a note released Saturday.
Bitcoin is gaining traction from mainstream investors, in part because of the perception that it is a store of gold-like value. Bitcoin bulls have tried to argue that investors should add the cryptocurrency to their portfolio to hedge against a possible rise in inflation.
But skeptics are not sure. Analysts at JPMorgan said in a note last week that bitcoin is an “economic side show,” and that the rise of digital finance – not bitcoin – is the “true story of financial transformation at a time Covid-19. “