Bitcoin (BTC) price dropped again on Tuesday for a short time below $45,000 and then jumped up in very volatile trading. As of 8:24 AM stood at $48838.871 at 7.55 am ET. after climbing to a record level of $58,000.
The recent drop is one the largest drop for the cryptocurrency since January when it lost 17% in March of 2020. Bitcoin critics like are Peter Schiff and Treasury Secretary Janet Yellen have to feel somewhat vindicated.
Yellen recently told CNBC Bitcoin is “an extremely inefficient way of conducting transactions, and the amount of energy that’s consumed in processing those transactions is staggering. I don’t think that bitcoin… is widely used as a transaction mechanism.”
However, many big companies have recently made investments in Bitcoin and other cryptocurrencies. Recently Telsa announced it invested $1.5 billion into Bitcoin. This has lead to the addition of many new traders have embraced it and caused the surge of trading cryptocurrencies.
One of the unforeseen side effects of Telsa’s investment in Bitcoin is that its share price is now tied to Bitcoin’s value. Daniel Ives, an analyst at Wedbush told CNBC “Musk is now tied to the bitcoin story in the eyes of the Street and although Tesla made a billion paper profit in its first month owning the digital gold, it comes with added risk, as seen this week.
Looking at the Tesla stock chart above, the stock did fall when Bitcoin fell but has yet to recover yet. Investors will have to wait for the market to open to see the full effect of the sudden jump back of Bitcoin on the stock.