The move followed 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 start of trading on Tuesday, but this is still down more than 10% from Monday’s levels.
On Monday, Yellen, a former Federal Reserve chairman, also raised some doubts.
At the New York Times DealBook conference, Yellen said bitcoin is “an extremely inefficient way to conduct transactions” and expressed concern about its price fluctuations.
“It’s a very speculative asset and I think people should be careful. It can be extremely volatile and I’m worried about the potential losses that investors may suffer,” Yellen said.
Gates’ negative comments didn’t help either.
In an interview with Bloomberg, Gates said it was one thing for Musk and Tesla to invest in bitcoin, but that doesn’t mean average investors should pursue that advantage.
“I think people are bought with these obsessions, that maybe they don’t have that much money to save, so I’m not a bullish on bitcoins,” Gates said.
“My general thought would be that if you have less money than Elon, you should probably keep an eye out.”
And in case the score stays at home, everyone less Amazon (AMZN) CEO Jeff Bezos has less money than Elon, including Bill Gates.
It’s also worth noting that Gates, like his good friend Warren Buffett, has been a Bitcoin bearer for some time, a position that could have lost a lot of money to average Bitcoin investors if they had listened to him.
In fact, Gates said in 2018 that he would reduce bitcoin if there was an easy way to do it. At the time, the cryptocurrency was trading at less than $ 10,000.
Despite the recent decline, bitcoin prices have still risen more than 65% so far in 2021.
This dramatic wave is sounding alarms for many on Wall Street, reminding some veteran strategists of previous market bubbles and speculative frenzy.
“While Bitcoin has gained significant credibility in recent months due to the interest of institutional investors,” Kristina Hooper, Invesco’s chief global market strategist, said in a report Monday, “it could still be the digital equivalent of “tulip mania,” which was Holland’s most important in the 1600s and sent the price of tulip bulbs to astronomical and unsustainable highs before their inevitable shock. ”
