London (AFP)
The price of bitcoin plunged on Tuesday, dragging other cryptocurrencies after a pessimistic message from Tesla boss Elon Musk and a new warning from US Treasury Secretary Janet Yellen.
Around 11:20 a.m. GMT (12:20 p.m. in Paris), bitcoin lost 14% to $ 47,255, and ethereum, the second largest cryptocurrency, fell in its wake by 18% to $ 1,475.
Since December 2020, bitcoin has continued to push back its all-time high, which rose from $ 20,000 to $ 58,350 in less than three months on Sunday, galvanized by the growing interest of institutional investors.
Electric vehicle giant Tesla rekindled the market flames in early February by announcing that it had bought $ 1.5 billion in bitcoins, while its leader, Elon Musk, touted the merits of cryptocurrencies on social media.
Since the announcement, the price of bitcoin has risen another $ 20,000, and ethereum, the second largest cryptocurrency, also hit an all-time high of $ 1,975 on Sunday.
Defending the merits of cryptocurrencies on Twitter, Elon Musk blurted out on Saturday: "That said, bitcoin and ethereum look high, lol."
After resisting a few hours, cryptocurrencies began to decline.
"This is not a very good sign for a so-called safe haven asset to follow a man's instructions to the letter," Swissquote market analyst Ipek Ozkardeskaya said in a note.
On Monday, it was the turn of Janet Yellen, former president of the American Central Bank (Fed) to expand on her opinion on bitcoin in an interview with the New York Times.
"It is a highly speculative asset," she said, adding: "I am worried about the potential losses that investors could suffer."
In addition to investment funds and a few companies like Tesla, many individuals are buying fractions of bitcoins, taking advantage of the many platforms that have flourished in recent years.
Market observers, who welcomed the professionalization of the market at the end of 2020, noted that public interest had reached levels not seen since 2017, when prices had skyrocketed before collapsing.
"The media machine is running wild," comments a cryptocurrency seller on condition of anonymity.
Given the dizzying performance of bitcoin, the significant declines of the last two sessions have only erased the escalation of the previous nine days.
© 2021 AFP