Bitcoin, the dominant cryptocurrency in the world, is losing altitude after reaching all-time highs over the weekend, driven by Elon Musk’s tweet that prices do seem high and some words of caution from Treasury Secretary Janet Yellen.
The world’s largest cryptocurrency, Bitcoin, declined to slightly over $52,000 on Monday after hitting $58,000 on Sunday afternoon. Billionaire Elon Musk tweeted on Saturday a post saying Bitcoin and Ethereum seem high. Significantly, Tesla CEO’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 BTC versus gold-backed currency.
According to data from Coin Metrics, Bitcoin fell by 16% in the last 24 hours, sinking below $50,000 to trade as low as $45,389.
Smaller digital tokens like ether and XRP also declined. Ether dropped by 15% to a price of $1,497, while XRP dipped 21% to trade around 45 cents.
Bitcoin is still up over 60% since the start of the year
On February 23, Treasury Secretary Janet Yellen spoke at the DealBook conference about Bitcoin’s use for transactions. She announced that the amount of energy used for the process is staggering.
She announced that she doesn’t consider that Bitcoin is widely used as a transaction mechanism, and it’s an incredibly inefficient way of conducting transactions.
Furthermore, it’s important to note that Bitcoin and other crypto coins, such as Dogecoin, require a lot of computing power to conduct transactions. These heavy computer calculations, also known as mining, require a tremendous amount of power, more than the country of Argentina.
During the 2020 year, Bitcoin was quite volatile as it stood at $5,000 in April 2020 and surpassed $29,000 by the end of the year.
Bitcoin is still up over 60% since the start of the year. According to the former Federal Reserve chair, it’s a highly speculative asset, and people should be aware of it. He says Bitcoin can be extremely volatile, and investors might suffer from losses.