Bitcoin drops 10% after Elon Musk said prices appear high

elon musk bitcoin tweet

Bitcoin drops 10% after Elon Musk said prices appear high, Bitcoin is down 17% after Elon Musk's tweet, Bitcoin is down below 50,000 by more than 10% on Monday. 

And it happened after Tesla CEO Elon Musk said on Saturday that bitcoin prices appeared excessive and the digital currency was still More than 80% so far this year.

Read Also: The secret of the relationship between Bitcoin and Tesla

But what happened and what caused the price of Bitcoin to drop

Prices seem high, and this quote put the staggering bitcoin price down temporarily after Elon Musk said it

The world's most valuable cryptocurrency sank more than 10% to a price of $ 51,993 Monday morning, according to data from Coin Metrics. Bitcoin fell below $ 50,000 to $ 47,700.

It was not immediately clear why Bitcoin fell on Monday. But on Saturday, Tesla CEO said bitcoin prices appeared excessive.

Bitcoin continued its downfall on Tuesday, falling to $ 45,041. After it hit $ 1 trillion in the market for the first time last week, Bitcoin is now worth less than $ 900 billion.

Elon Musk, which caused Bitcoin to skyrocket to over $ 58,000, has reversed course since its bid on Saturday.

Bitcoin price rises and falls

Bitcoin once rose to nearly $ 20,000 in 2017 before depreciating 80% of its value the following year.

The US Treasury Department warned on Monday that Bitcoin is a very speculative asset and there are concerns that investors will lose their money.

Because it is a very inefficient method of conducting transactions, the amount of energy that is expended in processing these transactions is staggering.

According to CoinDesk last week, Bitcoin was valued at $ 1 trillion in the market for the first time - and it's now back below that level.

 But the major Wall Street banks and Fortune 500 companies are turning towards cryptocurrencies.

Bitcoin and Tesla

Most recently, Musk has been a believer in Bitcoin, calling it a good thing, and saying he believes it is about to gain widespread acceptance by traditional finance experts.

And earlier this month, Musk, Tesla, said it had bought $ 1.5 billion in bitcoin and would accept cryptocurrency to buy its products.

That's what made the experts say: Tesla is on track to make more of its bitcoin investment than its profit from selling its electric cars in the whole of 2020.

Investing in bitcoin

Bitcoin is gaining traction from regular investors, in part because it is believed to be a store of similar value to gold.

In an effort to hedge against a possible spike in inflation, bitcoin bears have tried to demonstrate that investors should add the cryptocurrency to their wallet.

Skeptics are not convinced. They have described Bitcoin as an economic sideways, and that the rise of digital finance - not bitcoin - is the story of the true financial transformation of the Covid-19 era.

It's a hypothetical forest fire and the wood is very dry and waiting for a spark, and Elon Musk has that spark.

Bitcoin is very ineffective

This is what was stated by the US Treasury Secretary and warned against using it in illegal activity. It also raised the alarm about Bitcoin's impact on the environment. 

The massive rise in digital currency has reminded some critics of the massive level of electricity required to produce coins from it.

Bitcoin is not controlled by any central authority. So-called miners operate high-powered machines that compete to solve complex math puzzles in order to make a transaction.