On Sunday the cryptocurrency hit a record high of $ 58,042, bringing its year-to-date gain to over 100% On Friday it hit a market cap of $ 1 trillion

Monday’s slide is a sign of mistrust of cryptocurrency’s rapid rise Bears have long been saying bitcoin is in bubble territory, comparing the recent rally to what unfolded in 2017, when bitcoin plunged 45% shortly after peaking In 2020, bitcoin jumped 305%

Will Hobbs, chief investment officer of Barclays Wealth & Investments, told Insider he avoids cryptocurrency because of its wild swings – a view shared by many fund managers

Meanwhile, bitcoin has gained institutional support in recent weeks with announcements from Tesla and Mastercard, among others

MicroStrategy, the first company to buy bitcoin directly, now owns 70,784 bitcoins, worth more than $ 3.5 billion Michael Saylor, CEO of the enterprise software company, has long advocated for bitcoin, considering cryptocurrency as a hedge against a devaluation of the US dollar

On Sunday, Saylor tweeted to his half a million subscribers: “It’s only speculation if you don’t understand the technology or why you need it”

As for Tesla, Dan Ives, equity analyst at Wedbush Securities, estimated that the electric car maker had racked up $ 1 billion in profits on its $ 5 billion bitcoin investment

“Based on our calculations, we estimate that Tesla has so far made around $ 1 billion in profit over the past month from its investment in Bitcoin, given the surge in the price of Bitcoin, which now exceeds a trillion market value, “Ives wrote in a note released on Saturday

Tesla CEO Elon Musk has been a strong supporter of cryptocurrency, more recently describing it as “a less dumb form of liquidity than cash” On Saturday, Musk acknowledged that the price of bitcoin seemed high

Many believe the dizzying bitcoin rally could have been driven by buyers seeking to hedge against inflation or simply by people trading cryptocurrency

Nonetheless, some Bitcoin bulls have told Insider they expect the cryptocurrency to rise even more, to $ 250,000 over the next three years.

Read more: Bank of America says it’s buying these 14 cheap stocks that are best positioned to enjoy strongest economic return in nearly 40 years

BTC

Global news – US – Bitcoin plunges 17% as record rally gives way to valuation fears

Source: https://www.businessinsider.com/bitcoin-price-plunges-valuation-fears-after-record-shattering-rally-2021-2