It’s been a rough 24 hours for bitcoin traders. The cryptocurrency has plunged 16% from its all-time high in just one day, falling from $58,000 on Sunday to just over $46,000 as of the time of this writing.
So what happened? Two things. Or, rather, two people may be the reason why:
- Elon Musk: You knew Musk had to be involved somehow. And of course, his participation involves a tweet. When it comes to businesses or stocks, a tweet from Musk is either the kiss of death or manna from heaven. In bitcoin’s case, it may have been the former. On Saturday, Musk tweeted that the then-skyrocketing price of bitcoin did “seem high.” The next day bitcoin topped out at an all-time high before it started dropping.
- Janet Yellen: The U.S. Treasury Secretary is one of the most powerful people on the planet when it comes to moving markets. And comments from her on Monday are most likely what lead to that 24-hour 16% slide. On Monday, Yellen called out bitcoin’s role in funding illegal activities. She also called it energy inefficient due to how much power it takes to generate a single bitcoin, and thus said it was an “extremely inefficient way of conducting transactions,” reports CNBC.
But look, before you go crying for any bitcoin owners, also understand that 2021 has been a banner year so far for the cryptocurrency. Though one bitcoin is worth around $46,000 now—down from an all-time high of $58,000 a few days ago—bitcoin is still up 60% YTD.
Also, bitcoin has seen massive plunges before. As CNBC points out, in 2017 bitcoin hit a then-all-time high of $20,000 . . . before plummeting 80%. Will bitcoin have a fall as bad as that now—and will it recover? Who knows. But people will definitely pay attention to anything Musk and Yellen have to say on the matter.