Bitcoin’s price fell below $ 50,000 in a major correction on Monday just before the US market opened. Earlier today there was a price turbulence in the crypto market, BTC for example, registered a drop of around 15%.
The downward price movement came after Bitcoin hit new all-time highs above $ 58,300 over the weekend.
This pullback, which many anticipated when 28,000 BTC were deposited in Gemini, also caused other cryptocurrencies to fall in time with Bitcoin.
In this sense, the entire market followed the fall of the main cryptocurrency in the market. Therefore, a price turbulence continued to be experienced.
Ethereum is down 8.74% in the last 24 hours according to our internal Crypto Online tool. Trading at $ 1,740 after falling to $ 1,546, while Bitcoin is trading at $ 53,000 registering a variation of -6.75%.
Up to 5% of US public companies will follow Tesla’s purchase of Bitcoin
“Tesla’s strategic adoption of Bitcoin will have a dramatic impact on institutional adoption of the digital asset,” according to Dan Ives of Wedbush Securities.
In an interview with CNBC on Monday, Ives said Tesla’s exposure to Bitcoin “is not just a fad.” If not, it is part of a long-term strategy driven by an investment and business thesis.
“I think Tesla is going to double its investment in Bitcoin,” he said.
“Elon Musk and Tesla are definitely going to jump into the Bitcoin pool because they’re not just doing it from an investment perspective, but from a transactional perspective.
Ives was referring to Tesla’s recent decision to allocate $ 1.5 billion in Bitcoin and begin accepting the digital asset as a payment method.
At the time of the interview, Tesla had made $ 1 billion in paper earnings from his purchase of BTC. “That is more than they have made in profit from all EV sales in 2020,” he said.
Wedbush Securities believes that between 3% and 5% of publicly traded companies will adopt Bitcoin in the next 12 to 18 months, although they will be limited solely to investments, Ives said. The 5% threshold is unlikely to be exceeded without greater regulatory clarity around BTC.
BTC’s liquidity has deteriorated, JPMorgan strategist said
Although Bitcoin has tripled in price in the last quarter, it suffered a drop in the last 24 hours, when price turbulence was recorded in the market. JPMorgan analyst Nikolaos Panigirtzoglou alleges lack of liquidity.
“Market liquidity is currently much lower for Bitcoin than it is for gold or the S&P 500, which means that even small flows can have a big impact on prices.” The analyst wrote in a note on Friday (that is, before the price dropped).
According to this analysis, Bloomberg refers, that such a situation opens the possibility of sudden movements up or down in the cryptocurrency depending on the ardor in the predominant market for digital assets.
In fact, many of the investors in recent days expressed surprise at the high price reached just as the campaign of the “laser eyes” in support of a BTC expanded towards USD 100,000. Even Tesla CEO Elon Musk said on Twitter that Bitcoin and Ethereum prices “seem high.” (It’s part of the tweets for a discussion between Musk and gold investor Peter Schiff.)
Bitcoin is inefficient at transacting, says Janet Yellen
Janet Yellen made a comment about digital currencies during a public event. Addressing the post-COVID-19 economic recovery, Yellen claimed that crypto assets could provide “faster and cheaper” payment options.
Additionally, Yellen felt that digital currencies raised many issues, which she believed federal regulators should look into. Some of these topics include consumer protection and money laundering, among others.
However, Yellen’s stance on Bitcoin remains the same; claimed that the asset was “extremely inefficient to transact.” He also believed that the world’s largest digital currency is a “highly speculative asset.”
At the same time, Yellen was bullish on central bank-backed digital currencies, saying “it makes sense for the federal reserve to study dollar digital currency.”