Bitcoin reached the milestone of a $1 trillion market cap last week. It appears, however, that a tweet from Tesla CEO Elon Musk, some words of caution from Treasury Secretary Janet Yellen and comments from Microsoft co-founder Bill Gates are making its value drop fast.
The popular cryptocurrency fell to slightly over $47,000 on Tuesday, after breaking the $58,000 mark Sunday afternoon. Musk tweeted Saturday that "BTC & ETH do seem high lol," referring to Bitcoin and the digital coin Ethereum. Musk's tweet was part of a reply to a tweet from Peter Schiff, chief market strategist for brokerage firm Euro Pacific Capital, about the value of Bitcoin versus gold-backed currency.
In an interview with Bloomberg, Gates gave his thoughts on Bitcoin and the idea that it can be affected so dramatically by a tweet from Musk.
"I'm not bullish on Bitcoin" he said. "If you have less money than Elon, you should probably watch out."
Gates also expressed concern about Bitcoin's massive use of energy, similar to a point Yellen made during the DealBook conference on Monday. She remarked about how the amount of energy used for the transactions is "staggering."
"I don't think that Bitcoin … is widely used as a transaction mechanism," she said, according to CNBC. "To the extent it is used I fear it's often for illicit finance. It's an extremely inefficient way of conducting transactions, and the amount of energy that's consumed in processing those transactions is staggering."
Bitcoin and other crypto coins such as Dogecoin require a lot of computing power in order for people to conduct transactions. These heavy computer calculations, also known as mining, need a huge amount of power -- more than the country of Argentina.
For most of 2020, Bitcoin rallied from its low of just shy of $5,000 in April to jump past $29,000 by the end of the year.