Bitcoin started dropping on early Monday, but it briefly gained before dropping below $50,000 once again on Tuesday. The leading cryptocurrency’s downward movement came after bitcoin reached new record highs above $58,300 over the weekend. The drop seemed to accelerate as U.S. Treasury Secretary Janet Yellen described bitcoin as a “highly speculative asset” that is extremely inefficient for transactions. At the time of writing, BTC is changing hands at just below $50,000.
Bitcoin dropped after Elon Musk says BTC and ETH prices “seem high.”
Elon Musk tweeted Saturday that “BTC & ETH do seem high lol,” referring to Bitcoin and the second-leading cryptocurrency Ethereum. Musk’s tweet was part of a reply to a tweet from Peter Schiff, chief market strategist for brokerage firm Euro Pacific Capital, about the value of Bitcoin versus gold-backed currency. On Monday, Yellen spoke at the DealBook conference about Bitcoin’s use for transactions, saying the amount of energy used for the process is “staggering.” “I don’t think that Bitcoin … is widely used as a transaction mechanism,” she said, according to CNBC. “To the extent it is used, I fear it’s often for illicit finance,” she added.
Bitcoin still trades near the $50k mark.
Bitcoin witnessed the most impressive rally in its entire history this year after the price reached close to $59,000 for the first time. The upward movement in the price was mostly driven by an increased institutional interest in the leading cryptocurrency. As reported early, Elon Musk-led Tesla purchased $1.5 billion worth of bitcoin sometime in January this year. Analysts have estimated that Tesla has made nearly $1 billion in profits just from its bitcoin purchase.