SINGAPORE (Reuters) – Bitcoin stopped just outside the $ 50,000 mark on Monday and other cryptocurrencies slipped as investors took profits from a record-breaking rally driven by a worldwide shift in investors’ and public stance on digital assets.
Bitcoin fell as much as 5.6% to $ 45,914 in Asian trading hours after sending a record high of $ 49,714.66 on Sunday. Rival crypto-ethereum slipped more than 8%, though both later paired some of those losses.
The dipping is now hitting the brakes on a wave that has rocked the cryptocurrency from the brink of financing to Wall Street as major investors and large companies have begun to take the digital asset seriously and began buying much of it.
Bitcoin has risen by approx. 20% a week since electric car maker Tesla Inc announced it had $ 1.5 billion in bitcoin and would accept the currency as payment. It has gained more than 60% for the year to date and more than 1,100% since March last year.
“There is this unadulterated wave of big players (buying) that has continued to push the price higher,” said Chris Weston, research manager at Melbourne brokerage firm Pepperstone. “We may see one or two large funds just paying out,” he said.
“The big question is: OK, you want to buy the withdrawal, but how big is the repayment that we are talking about?”
The moon’s New Year’s holidays in Hong Kong and China also kept a lid on movements in Asia, while a tweet from Tesla boss and crypto lawyer Elon Musk seemed to weigh the price of dogecoin, which he had previously promoted.
“If large dogecoin holders sell most of their coins, it will get my full support,” he tweeted.
Dogecoin, a dog-themed currency created as a joke, has been volatile in recent weeks due to a number of Musk tweets referring to it.
It has fallen 18.3% to $ 0.0536 in the last 24 hours, according to CoinDesk. Ethereum last sat at $ 1,740, approx. 7% below last week’s record high of $ 1,879.
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The rise of Bitcoin has a cryptocurrency that is still hardly used for transactions on the verge of $ 50,000 – far from software developer Laszlo Hanyecz’s purchase in 2010 of two pizzas for 10,000 bitcoins.
But unlike previous speculative bitcoin collections, which are mainly driven by traders in Asia, gains in the last few months are driven by a seismic shift in the attitude of US investors.
Tesla’s investment followed multi-million dollar bitcoin purchases by corporate software firm MicroStrategy and a number of Wall Street fund managers, such as billionaire Stanley Druckenmiller, who is positive about the asset.
Bloomberg reported on Saturday that Morgan Stanley’s investment arm also weighs a bet on bitcoin.
Meanwhile, bitcoin has made progress towards being an exchange medium where PayPal allows customers to use bitcoin at its merchants and Mastercard is preparing to allow the use of cryptocurrency across its huge network.
The Bank of NY Mellon said last week that it was forming a new entity to help clients own and trade digital assets, and Japanese financial conglomerate SBI Holdings is in talks with foreign companies about its own crypto-joint venture.
“In the crypto space, these institutions that come to the party are seen as steps towards acceptable and possible use,” said Michael McCarthy, chief strategist at CMC Markets in Sydney.
Bitcoin has been the most prominent recipient, he said, but price movements in other cryptocurrencies – such as EOS, which according to CoinDesk has more than doubled since the end of December – show that the door remains open to rivals.
“The race is underway among these candidates,” he said.
Clip by Sam Holmes and Jacqueline Wong
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