Bitcoin plunges below $50,000 after a slid of 12% on Tuesday. The record-breaking rally is shattering in the face of ‘excessive price’ doubts.
The institutional embrace of bitcoin propelled currency to new highs at the start of this month. The price of BTC was closing in on $59,000 on Sunday. However, the start of this week is slightly off-putting for crypto enthusiasts. Bitcoin’s value dropped by 17% on Monday. And on Tuesday, it had a fall of 12%. Still, the value of bitcoin is up by 400% since the last year.
Elon Musk’s car company Tesla invested 1.5 billion dollars in bitcoin. This revelation proved to be the tipping point for the crypto market’s bull run. Bitcoin immediately jumped beyond $47k following the news. In the subsequent days, MicroStrategy Inc. announced a sale of convertible bonds to $900 million to buy even more BTC. Resultantly, we were in for a flight beyond 50K.
Mr Elon expressed scepticism over bitcoin and ethereum’s excessive price surge on Saturday last week. His sentiments whipsawed the parent digital token. The altcoins also followed the same route. Ether’s price is down by 16% today.
Multiple analysts and industry leaders are expressing concerns over the place of BTC in the financial world. Bill Gates, the pioneer of Microsoft, said in an interview that Bitcoin’s price is “based on mania”. Moreover, Treasury Secretary Janet Yellen called crypto an “extremely inefficient way of conducting transactions”.
The global pandemic of 2020 created a soft corner for crypto in the heart of financial authority. The nosediving economies and paper money’s inflation made bitcoin look good in comparison. However, now everything is recovering back to normal. Therefore, we expect central banks to dial back easy-money policies that helped propel bitcoin higher.
The Faithful Are Still Rooting For Bitcoin:
Crypto believers are still positive about the bright future of bitcoin in the coming years.
The story is #bitcoin has always been two steps forward, one step back, then two steps forward. Few understand this.
— Tyler Winklevoss (@tyler) February 22, 2021
Bitcoin plunges frequently for price corrections. Every bull rally is followed by a pullback. In January, BTC went beyond $40K before falling to $28K later that month. Hence, a small plunge is not the end of the game for the faithful. They are in for a rollercoaster ride come hell or high water.