By Tom Westbrook
SINGAPORE (Reuters) – Bitcoin stagnated close to the $ 50,000 mark on Monday and other cryptocurrencies fell, as investors profited from a record-breaking recovery that is being driven by a worldwide shift in investor and public attitudes on digital assets.
Bitcoin fell by 5.6% to $ 45,914 in the Asian trading session, after registering a record high of $ 49,714.66 on Sunday. The rival crypto ethereum fell more than 8%, although both later reduced some of those losses.
The crash, for the time being, pulls the brakes on a wave that has jumped cryptocurrency from the peripheries of finance to Wall Street, as big investors and big companies started taking digital assets seriously and buying many of them.
Bitcoin has risen about 20% in the week since electric car maker Tesla Inc announced it had $ 1.5 billion in bitcoin and would accept the currency as payment. It has gained more than 60% in the year so far and more than 1,100% since last March.
“There is this unadulterated wave of big players (buying) that has continued to push the price up,” said Chris Weston, head of research at Pepperstone brokerage in Melbourne. “We may be seeing one or two large funds coming out,” he said.
“The big question is: OK, you want to buy the setback, but how big is the setback we’re talking about?”
Lunar New Year holidays in Hong Kong and China also limited movement in Asia, while a tweet from Tesla chief and cryptography advocate Elon Musk seemed to weigh on the price of dogecoin, which he had previously promoted.
“If the biggest dogecoin holders sell most of their coins, it will have my full support,” he tweeted.
Dogecoin, a dog-themed coin created as a joke, has become volatile in recent weeks due to a series of tweets by Musk referring to it.
It fell 18.3% to $ 0.0536 in the past 24 hours, according to CoinDesk. Ethereum stood at $ 1,740, about 7% below last week’s record of $ 1,879.
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The rise of Bitcoin has a cryptocurrency that is still underused for transactions around $ 50,000 – a far cry from the purchase of software developer Laszlo Hanyecz in 2010 for two pizzas for 10,000 bitcoins.
But in contrast to previous speculative bitcoin highs, driven by traders mainly in Asia, gains in recent months have been driven by a seismic shift in the attitude of U.S. investors.
Tesla’s investment followed multi-million dollar bitcoin purchases by enterprise software company MicroStrategy and a number of Wall Street fund managers, like billionaire Stanley Druckenmiller, sounding positive about the asset.
Bloomberg reported on Saturday that Morgan Stanley’s investment arm is also evaluating a bet on bitcoin.
Meanwhile, bitcoin has taken long strides to become a medium of exchange, with PayPal allowing customers to use bitcoin in their merchants and Mastercard gearing up to allow the use of cryptocurrencies in its vast network.
Bank of NY Mellon said last week that it has formed a new unit to help customers own and trade digital assets, and Japanese financial conglomerate SBI Holdings is in negotiations with foreign companies for its own crypto joint venture.
“In the cryptographic space, these institutions that come to the party are seen as steps towards acceptable and possible use,” said Michael McCarthy, chief strategist at CMC Markets in Sydney.
Bitcoin has been the most important beneficiary, he said, but price movements in other cryptocurrencies – such as EOS, which has more than doubled since the end of December, according to CoinDesk – show that the door remains open for rivals .
“The race between these candidates is open,” he said.
(Edited by Sam Holmes and Jacqueline Wong)