Major cryptocurrencies plummeted on Tuesday morning, when investors recovered from the surge that took digital assets at dizzying prices.
Bitcoin’s price plummeted about 14 percent to $ 46,605.79, after falling to $ 44,964.49 overnight, CoinDesk data shows, marking its biggest daily drop in a month.
Dogecoin, the meme-inspired cryptocurrency that has become a favorite of the online cult, recently plummeted by more than 20% to about 4.4 cents. And Ether, second only to bitcoin in terms of market value, fell almost 19%, to $ 1,455.56.
The liquidation caused the total value of the cryptocurrency market to fall by about 16%, to almost $ 1.4 trillion, just days after reaching all-time records, according to Coinmarketcap.com.
Elon Musk, Tesla’s CEO – one of the most prominent crypto sponsors – seemed to kick-start the fall over the weekend with a tweet declaring that bitcoin and Ether prices “look high”, although its electric car maker has US $ 1.5 billion invested in the previous currency.
Markets were also startled by skeptical comments on Monday from Treasury Secretary Janet Yellen, who called bitcoin “extremely inefficient” and “highly speculative”.
“People should be aware that it can be extremely volatile and I am concerned about the potential losses that investors may suffer,” Yellen said at a conference.
Tuesday’s drop underscored the volatility in cryptocurrencies just a week after bitcoin rose above $ 50,000 for the first time.
Crypto prices have risen in recent months, as an increasing number of institutional investors and large companies like Tesla and Mastercard have begun to treat digital currencies as more conventional investment assets.
But skeptics argue that this type of violent price fluctuation could be an obstacle to wider adoption of cryptocurrency.
“The types of increases we have seen are not sustainable and just cause setbacks like this,” Craig Erlam, senior market analyst at OANDA, told Reuters.
With Post Wires