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Major cryptocurrencies plunged early Tuesday as investors sidelined a rally that drove digital assets to staggering prices.
The price of bitcoin fell about 14% to $ 46,605.79 after dropping to $ 44,964.49 overnight, according to data from CoinDesk, marking its biggest daily drop in a month.
Dogecoin, the memes-inspired cryptocurrency that has become a cult favorite online, recently fell more than 20% to around 4.4 cents. Ether, just behind bitcoin in terms of market value, fell almost 19% to $ 1,455.56.
The sale knocked the total value of the cryptocurrency market down by around 16% to almost $ 1.4 trillion just days after hitting all-time highs, according to Coinmarketcap.com.
Tesla CEO Elon Musk – one of crypto’s largest funders – appeared to be launching the plunge this weekend with a tweet declaring Bitcoin and Ether prices “appear high” even if its electric car maker invested $ 1.5 billion in the old part.
Markets were also frightened by skeptical comments Monday from Treasury Secretary Janet Yellen, who called bitcoin “extremely inefficient” and “highly speculative.”
“People should be wary that this can be extremely volatile and I am worried about the potential losses investors might incur,” Yellen reportedly told a conference.
Tuesday’s drop underscored cryptocurrency volatility just a week after bitcoin first broke $ 50,000.
Crypto prices have risen in recent months as a growing number of institutional investors and large corporations such as Tesla and Mastercard have started to treat digital coins as more traditional investment assets.
But skeptics have argued that these types of wild price swings could be a barrier to wider adoption of cryptocurrency.
“The types of rallies we have seen are not sustainable and just invite pullouts like this,” Craig Erlam, senior market analyst at OANDA, told Reuters.
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