Bitcoin continued its decline today, Tuesday, under the influence of comments by US Treasury Secretary (Janet Yellen) and Tesla CEO (Elon Musk) Elon Musk.
The currency had earlier declined by 16 percent, reaching its lowest level during the day at $ 45,000.
Other digital currencies also fell, with Ethereum falling 17 percent to $ 1458, while XRP fell 22 percent to trade around 44 cents.
On Monday, Yellen described Bitcoin as a very ineffective method of conducting transactions and warned against using it for illegal activity.
The alarm has also sounded about Bitcoin’s impact on the environment, and the massive rise in the digital currency has cited some critics of the massive level of electricity required to produce new currencies.
Bitcoin is not controlled by any central authority, and miners operate high-powered machines to compete to solve complex math puzzles for a transaction.
The Bitcoin network consumes more electricity than Pakistan, according to an online tool from researchers at the University of Cambridge.
Yellen also cautioned about the risks for retail investors who buy Bitcoin.
“It is a highly speculative asset and people should be aware that it can be very volatile,” said the former Federal Reserve Chairman, and I am concerned about the potential losses that investors may suffer.
Bitcoin is still up by more than 360 percent in the last 12 months and nearly 60 percent since the start of the year, and price fluctuations of more than 10 percent are not rare in the crypto market.
Bitcoin once rose to nearly $ 20,000 in 2017 before dropping 80 percent of its value the following year.
The value of the digital currency reached a trillion dollars in the market for the first time last week, despite its decline now to less than 900 billion dollars.
Cryptocurrencies got a boost due to news from Wall Street banks and major companies, such as: Tesla and MasterCard.
Musk said over the weekend that Bitcoin and Ethereum prices appear to be high, and his comments came after Tesla announced earlier this month that it had bought $ 1.5 billion worth of Bitcoin.
Cryptocurrency futures traders were borrowing a lot of money to buy bitcoin contracts, causing borrowing rates to spike, and by Saturday, February 20, they were paying 144 percent annually.
Obviously, this situation cannot continue, and under these conditions, prices must drop to get rid of over-optimistic borrowers and bring borrowing rates back to normal levels.
Bitcoin has gained momentum from ordinary investors, in part because it is believed to be a store of similar value to gold.
And rising investors claim that the cryptocurrency can act as a hedge against rising inflation.
But skeptics warn that Bitcoin has no intrinsic value and is one of the biggest market bubbles in history.