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Bitcoin falls below $ 50,000 amid caution on rally

(Bloomberg) – Bitcoin fell Tuesday after a bout of volatility brought to light lingering doubts about the durability of the digital currency’s fascinating rally, as the cryptocurrency fell about 12.5% ​​to $ 48,071 in London before falling. below US $ 50,000. On Monday the currency lost 17% before reducing the fall. Even so, bitcoin has risen 390% in the last year, with US Treasury Secretary Janet Yellen and Microsoft Corp. co-founder Bill Gates being the last to speak in a debate on the digital currency. Gates warned of how investors could be swept up in the crazes, while Yellen said bitcoin is a very “inefficient” way to transact. Deep down there is concern that the global economic recovery from the pandemic will eventually lead to banks. central to curtailing the easy money policies that helped propel Bitcoin higher. On a technical level, the digital currency appears under pressure, according to Miller Tabak + Co. A monthly index of relative strength for bitcoin is “extremely overbought,” the company’s chief market strategist Matt Maley wrote in a note over the weekend. Gates and Yellen got into a discussion that had lately been dominated by Tesla Inc. CEO Elon Musk, who tweeted that bitcoin prices “look high,” but also that cryptocurrency is a “less silly” version of it. Tesla this month revealed a $ 1.5 billion investment in Bitcoin, while MicroStrategy Inc. increased a convertible bond sale to $ 900 million to buy more Bitcoin. Bitcoin faithful argue that the digital currency is a hedge for risks like faster inflation and is getting more attention from corporate treasurers and long-term investors. It reminds others of the rise and fall of the digital currency in 2017. “It’s a purely speculative asset,” said Nader Naeimi, head of dynamic markets at AMP Capital Investors in Sydney. A pullback in bitcoin shouldn’t be surprising “given long positions. current overleverage in mainstream currencies, “said Annabelle Huang, a partner at Amber Group, a crypto financial services firm. Bloomberg’s Galaxy Crypto Index, which encompasses bitcoin, ether and other digital currencies, fell as much as 13%. Original Note: Bitcoin Slumps Below $ 50,000 as Caution Sweeps Over Crypto RallyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source. © 2021 Bloomberg LP

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