Cryptocurrency Market Tanks $200 Billion in 24 Hours
Bitcoin led a broad market sell-off, losing 12% of its value days after passing the $50,000 milestone.
The cryptocurrency was struck by a widespread market sell-off at the beginning of the week, ending a bull run prompted by both corporate and retail interest.
Bitcoin, which accounts for 60% of the cryptocurrency market by value, was sitting at around $57,500 at midnight on Monday before tumbling over the day’s trading and finally coming to rest down 12.5% at $48,876 by 8:15 AM Tuesday in London.
Most major cryptocurrencies also suffered a sharp drop on the day, with Ethereum – the world’s second-largest cryptocurrency – falling 14.8% to $1,600. The meme asset Dogecoin, which recently surged in popularity due to tweets from Tesla CEO Elon Musk, also shed 10% to $0.0508.
CoinMarketCap.com estimates that the global cryptocurrency market fell 14% over the last 24 hours.
The sell-off, which began on Monday, was apparently triggered after US Treasury Secretary Janet Yellen criticised Bitcoin, describing it as “highly speculative” and an inefficient means of payment.
“People should beware it can be extremely volatile and I do worry about potential losses that investors could suffer,” Yellen said during an interview with the New York Times.
Bitcoin has surged in price over the past year, reaching over $1 trillion in total market value. Its rising value and status as a mainstream mode of payment has drawn further attention from both individual investors and established companies, which has helped to lift other virtual tokens along with it.
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Crypto’s latest bull run was prompted by Tesla’s investment of $1.5 billion in Bitcoin earlier this month, boosting the currency to a then-record high of $43,968. CEO Elon Musk, who had previously tweeted positively regarding Bitcoin and cryptocurrency more broadly, distanced himself from Tesla’s decision and remarked that the price of Bitcoin and Ethereum seemed “high”.