Bitcoin Declines in the Wake of Tesla Purchase Inspired Euphoria
Bitcoin gave up some of its gains fueled by Tesla Inc.’s $1.5 billion investment into the token that drove prices to record highs.
The world’s largest cryptocurrency fell as much as 7.5% Wednesday to $43,764 after surging past $48,000 earlier this week. Alt coins including Ether and Litecoin also declined.
“It’s no surprise that it’s taking a breather,” said Matt Maley, chief market strategist at Miller Tabak + Co.
While Bitcoin is gaining traction among big league financial players like Elon Musk — who announced Monday that Tesla added the token to its balance sheet — Wednesday’s losses underscore the speculative and volatile nature of the coin. Again, raising questions on how viable a corporate strategy of converting company cash to crypto is.
“I’m a little surprised it wasn’t enough to push $50,000, if I’m honest, but it’s surely only a matter of time,” Craig Erlam, senior market analyst for OANDA Europe, said in a note.