Bitcoin continued its latest retreat, with its price falling below $50,000, Bloomberg reports.
BTC Price Check-In (8:55 a.m.): $49,009.96 (-7.89%)
Why It Matters: With a roughly 15% drop to around $46,000, investors are starting to jump ship on one of “the market’s frothiest assets.” As Bitcoin lands around its lowest price in two weeks, it raises important questions. Are investors becoming wary and preparing to retreat from crypto? Or is this just volatility in an unpredictable market?
The Argument For Bitcoin: In 2021 alone, Bitcoin has soared more than 50% as more investors recognize how digital currencies can act as an inflation hedge.
Bitcoin has had better weeks:
- Treasury Secretary Janet Yellen, a long-time Bitcoin skeptic, this week said the token is an “extremely inefficient way of conducting transactions.”
- Bill Gates also said he’s “not a fan” of the cryptocurrency and warned against being swept up by the speculation.
- Nader Naeimi, head of dynamic markets at AMP Capital Investors in Sydney: “It’s a pure speculative asset.”
This wasn’t the only asset to decline on a sharp sell-off on Tuesday.
- Tesla dropped 6% in pre-market trading.
- ARK Innovation, Cathie Wood’s flagship $28 billion ETF, fell around 7%.
- Bloomberg’s Galaxy Crypto Index, which includes Bitcoin, Ether and a handful of other digital tokens sank 19%.
The Takeaway: “A pullback in Bitcoin shouldn’t be surprising ‘given the current overleveraged long positions on mainstream coins,’ said Annabelle Huang, a partner at Amber Group, a crypto financial-services firm.”