Bitcoin’s price tumbled on Tuesday, bringing the cryptocurrency’s decline since Sunday to slightly over 20%, as the virtual coin traded below $45,000 the largest decline for a two-day period since the coronavirus-fueled crash in March 2020.
The decline has wiped out more than $100 billion of bitcoin’s market value, which last week climbed past $1 trillion for the first time, as U.S Treasury Secretary Janet Yellen and Tesla CEO Elon Musk weighed in on the cryptocurrency’s recent rally, with Yellen warning investors and the public of the dangers of owning Bitcoin.
The U.S Treasury Secretary and custodian of the $20 trillion economic juggernaut, raised her concern that the world’s most popular crypto asset could be ideal for money laundering and illicit transactions.
The concerns hovered around regulation since BTC isn’t controlled by any central authority. So-called miners run high-power machines that compete to solve complex math puzzles in order to make a transaction go through.
Over the weekend, Tesla CEO Elon Musk had shared his sentiments on a twitter post that, “BTC & ETH prices seemed High.” His comments came after Tesla’s announced earlier in the month in regulatory filings that the company had bought roughly $1.5 billion worth of bitcoin. Tesla shares also suffered their biggest fall since September 2020 a day after Musk’s sentiments.
Bitcoin wasn’t the day’s only loser. Ethereum (ETH), the second largest crypto by market capitalization faced a similarly shocking collapse from $1,930 to $1,700 after briefly coming within touching distance of $1,500. High-flying Binance coin BNB also dropped from $325 to $285 via a swift visit on a wick to $238.
Popular altcoin (alternative cryptocurrency to Bitcoin) ADA seemed to be the only crypto clinging to the color green as it held its recent run of steady form, as did Ripple (XRP) which seemed to attempt a minor breakout as the markets crumbled around it.
Investors appeared to be shrugging off the slump as another typical bump in the crypto road and one which, no doubt, will see trading volume return as investors look to buy what many are viewing as a dip in what is still very much a bull market.
Square Buys More Bitcoin
Jack Dorsey’s company Square bought $170 million worth of bitcoin, the company revealed in its fiscal fourth-quarter financial report on Tuesday. The company said it purchased approximately 3,318 bitcoins, expanding on its October 2020 buy of 4,709.
Square said it holdings in BTC now represent about 5% of the company’s total assets as of the end of the financial year 2020. Q4 saw Square achieve a gross profit of $804 million, up 52 percent over 2019. Cash App delivered gross profit up 162 percent year over year, to $377 million. The companies merchant ecosystem generated a gross profit of $427 million, up 13 percent year over year.
Volatility continues to run on the crypto markets with less regulations, even as countries like Nigeria pulled a steady move to ban trading on cryptocurrencies.
This post was first published at the tradingroom.co.ke