After a day that saw it soar over the weekend and break through $58,000 to set a new record high, bitcoin continued to fall during the afternoon hours on Monday BST, dropping below three integer hurdles between $55,000 and $53,000 in quick succession and extending its 24-hour decline to 8%.
Ten minutes before the U.S. stock market opened on Monday, mainstream cryptocurrencies accelerated their dive, with bitcoin dropping more than $3,000 in five minutes, falling through the $50,000 mark and then quickly dropping below $48,000, expanding its decline to more than 17% in 24 hours. Ether extended its intra-day decline to 20% at $1,547.77.
Earlier in the day U.S. Treasury Secretary Yellen said, “Bitcoin is often used for illegal financing and its application is inefficient; it is extremely speculative and people should be aware of that.”
Yellen also said the digital currency could be a faster and cheaper way to pay, but there are many issues to study, including consumer protection and anti-money laundering; it makes sense for the Federal Reserve to study digital dollar currencies.
However, bitcoin quickly rebounded after half an hour, with data from mainstream trading platform Coindesk showing that its price had rebounded back above $54,000, narrowing its intra-day decline to less than 6% and rebounding sharply from its earlier low of more than $6,000.
Bitcoin has risen sharply so far this year. Over the past six months, the price of bitcoin has risen about 350%. Bitcoin’s market cap surpassed $1 trillion on Friday, becoming a major milestone in the price breakout of the world’s most popular cryptocurrency.
And on Sunday, bitcoin set a new all-Time high, with the price soaring to an all-time high of $58,350 per coin. for the first time ever, the price of one bitcoin exceeded the price of one kilogram of Gold.
But Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase, warned that while bitcoin has about tripled in the past three months, liquidity in the market has now deteriorated.
The combined daily trading volume in the bitcoin spot and futures markets is about $10 billion, compared with $100 billion for gold, Panigirtzoglou said, adding that “the bitcoin market is currently far less liquid than gold or the S&P 500, meaning that even small flows of money can have a significant impact on prices. “
This makes it possible for bitcoin to go up or down, depending on how enthusiastic the market is about the digital currency.
Bitcoin’s recent surge has also unnerved tesla CEO Musk, who has invested heavily in bitcoin.
In a reply to cryptocurrency skeptic and gold fan Peter Schiff on Twitter, he publicly stated that gold is better than bitcoin and fiat currency, and that “fiat currency is just data that saves us from the inconvenience of bartering, and that data, like all data, is subject to delays and errors.” , “In that case, bitcoin and ethereum do seem high.”
Tesla disclosed documents on Feb. 8 showing that the company has purchased $1.5 billion in bitcoin. If the company’s bitcoin holdings remain unchanged, at $57,000 per coin, Tesla’s book profit for the bitcoin investment for one month would be about $990 million, which is 37 percent higher than the company’s net profit of $721 million for all of last year.
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