The move came after skeptical comments from Tesla CEO Elon Musk, Treasury Secretary Janet Yellen and Microsoft (MSFT) co-founder Bill Gates.
Prices stabilized at around $ 48,000 at the beginning of Tuesday’s trading session, but it is still more than a 10% drop from Monday’s levels.
On Monday, Yellen, former president of the Federal Reserve, also raised some doubts.
Speaking at the New York TImes DealBook conference, Yellen said that bitcoin is “an extremely inefficient way of conducting transactions” and expressed concern about wild price fluctuations.
“It is a highly speculative asset and I think people should be on the lookout. It can be extremely volatile and I worry about potential losses that investors may suffer,” said Yellen.
Gates’ negative comments didn’t help either.
In an interview with Bloomberg, Gates said that it was one thing for Musk and Tesla to invest in bitcoin, but that does not mean that average investors should follow suit.
“I think people are driven into these crazes, which may not have much money to spend, so I’m not optimistic about bitcoin,” said Gates.
“My general thought would be that if you have less money than Elon, you should probably be careful.”
And if you’re counting at home, everyone except Amazon (AMZN) CEO Jeff Bezos has less money than Elon – including Bill Gates.
It is also worth noting that Gates, like his good friend Warren Buffett, has been pessimistic about bitcoin for some time – a position that could have lost a lot of money to bitcoin investors if they had heard it.
In fact, Gates said in 2018 that he would sell bitcoin if there was an easy way to do that. The cryptocurrency was trading for less than $ 10,000 at the time.
Despite the recent downturn, bitcoin prices are still over 65% in 2021.
This dramatic increase is sounding the alarm for many on Wall Street, reminding some veteran strategists of past market bubbles and speculative frenzy.
“Although bitcoin has gained significant credibility in recent months because of the interest of institutional investors,” said Kristina Hooper, chief global market strategist at Invesco, in a report on Monday, “it may still be the digital equivalent of ‘ “Holland’s tulip craze in the 1600s and raised the price of tulip bulbs to astronomical and unsustainable highs before their inevitable fall.”
