The move followed skeptical comments from Tesla CEO Elon Musk, Treasury Secretary Janet Yellen, and Microsoft (MSFT) co-founder Bill Gates.
Prices stabilized around $ 48,000 in early trading on Tuesday, but that’s still a more than 10% drop from Monday’s levels.
But even Musk is beginning to show concerns about the rise of bitcoin, pointing at a tweet on saturday
who thought that the prices of bitcoin and ethereum, the world’s second largest cryptocurrency, “seem high.”
On Monday, Yellen, the former chairman 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 to transact,” and expressed concern about its wild price fluctuations.
“It is a highly speculative asset, and I think people should be careful. It can be extremely volatile and I am concerned about the potential losses investors may incur,” Yellen said.
Gates’s 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 that average investors should follow suit.
“I think people get carried away with these fads, that they may not have that much money to spare, so I’m not bullish on bitcoin,” Gates said.
“My general thought would be that if you have less money than Elon, you should probably be careful.”
And in case you keep track at home, everyone except 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 bearish on bitcoin for some time, a position that could have lost average bitcoin investors a lot of money if they had listened.
In fact, Gates said in 2018 that he would shorten bitcoin if there was an easy way to do it. The cryptocurrency was trading for less than $ 10,000 at the time.
Despite the recent pullback, bitcoin prices continue to climb more than 65% so far in 2021.
That dramatic rise is sounding the alarm bells for many on Wall Street, reminding some veteran strategists of past market bubbles and speculative frenzy.
“While bitcoin has gained significant credibility in recent months due to interest from institutional investors,” said Kristina Hooper, chief global market strategist at Invesco, in a report Monday, “it could still be the digital equivalent of the ‘ tulip mania ‘, which took over the Netherlands in the 17th century and sent the price of tulip bulbs to astronomical and unsustainable levels before their inevitable fall. ”