A chart from cryptocurrency exchange Upbit shows that Bitcoin price fell below 53 million won in the afternoon on Friday. (Upbit)
Bitcoin declined Friday, falling below 53 million won ($48,100) in the week that the largest cryptocurrency is suffering its worst pullback in a year.
The digital currency fell to as low as 52.88 million won in the afternoon, plunging almost 20 percent from Sunday’s record high of 65.84 million won.
Bitcoin’s volatility coincided with a slump in stock markets with investors wary over a sharp rise in US bond yields, hurting steep valuations of tech companies. The tech-heavy Nasdaq 100 lost 3.6 percent Thursday. Following declines in US stocks, the Korean domestic bourses also saw declines around 3 percent Friday.
Experts say that cryptocurrencies, which are not backed by anything substantial, attract investors who are after assets with risky but high future potential, just like tech stocks. However, the expectation of an economic recovery from the coronavirus pandemic and rapid vaccination have turned investors from some of the hottest tech stocks to companies that will benefit from the end of lockdowns.
Bitcoin‘s dizzying fluctuation came amid mixed messages from various sectors. Economic authorities including US Treasury Secretary Janet Yellen and Bank of Korea Gov. Lee Ju-yoel expressed skeptical views on digital assets. Yellen earlier this week said that digital currencies are very speculative assets that people should be aware of, and Lee noted that there is no intrinsic value in crypto assets.
Prominent businessmen like Bill Gates have issued warnings to investors. Gates, founder of Microsoft, warned investors to watch out “if you have has less money than Elon (Musk).”
Elon Musk, founder and CEO of US electric carmaker Tesla, said that the prices of Bitcoin and Ethereum, the second-largest digital coin, “seem high” in his own Twitter message on Feb. 20, helping push down the prices of the cryptocurrencies. Musk’s comment came about two weeks after his company on Feb. 8 announced that it had converted $1.5 billion into bitcoins in January, and it plans to accept the cryptocurrency as payment for its products in the future.
By Park Ga-young (firstname.lastname@example.org