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Bitcoin regained its luster during trading today, Wednesday, and once again surged above $ 50,000, making limited gains of 0.24% in the last 24 hours of trading.
Meanwhile, most cryptocurrencies, led by Ethereum, fell 0.31% to $ 1,627.38.
Bitcoin’s rise comes after declines over the past two days, hitting an all-time low at $ 45,000, in light of statements by US Treasury Secretary Janet Yellen and Tesla CEO Elon Musk.
The world’s most valuable digital currency fell 14% yesterday, to less than $ 50,000, to trade at around $ 47,000. The currency had previously fallen 16%, hitting its lowest level for the day at $ 45,000.
Yellen on Monday described Bitcoin as a very inefficient method of transacting and cautioned against using it for illegal purposes.
Alarms have also sounded over Bitcoin’s impact on the environment, and the massive rise of digital currency has cited some criticism of the enormous level of electricity needed to produce new currencies.
Bitcoin is not controlled by any central authority, and miners use high powered machines to compete against each other to solve complex mathematical 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 warned of 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 chairman of the Federal Reserve, and I am concerned about the potential losses investors could suffer.
Bitcoin is still up over 360% over the past 12 months and around 60% since the start of the year, and price swings of over 10% are not uncommon in the crypto.
Bitcoin has already risen to nearly $ 20,000 in 2017 before dropping 80% of its value the following year.
The value of digital currency hit $ 1 trillion in the market for the first time last week, despite dropping now to less than $ 900 billion.
Cryptocurrencies got a boost thanks to news from Wall Street banks and big companies, such as: Tesla and MasterCard.
Bitcoin and Ethereum
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 for $ 1.5 billion. Bitcoin dollars.
Cryptocurrency futures traders were borrowing a lot of money to buy Bitcoin contracts, which drove borrowing rates up and on Saturday, February 20, they were paying 144% per annum.
Obviously, this situation cannot continue and under these conditions, prices must fall to get rid of overly optimistic borrowers and bring lending rates back to normal levels.
Bitcoin has gained traction with ordinary investors, in part because it is believed to be a stock of similar value to gold.
And rising investors say cryptocurrency can act as a hedge against rising inflation.
But skeptics warn that Bitcoin has no intrinsic value and is one of the largest market bubbles in history.
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