After rising back above the $50,000 mark, Bitcoin prices today plunged from the crucial mark to trade below $49,000. The most popular virtual token had briefly surpassed the $50,000 level on August 23. The world's largest cryptocurrency by market capitalization fell over 2% to $48,610, as per CoinDesk.
Ether, the coin linked to ethereum blockchain and the second largest crypto, was trading marginally lower at $3,755, down 0.2%. Meanwhile, dogecoin prices tumbled 4% to $0.29, whereas, Cardano prices fell 2% to $2.93. Other cryptocurrencies like Stellar, Uniswap, Litecoin also tanked over the last 24 hours.
Cryptocurrencies have surged this year amid increased institutional interest and acceleration of development in areas like decentralized finance (DeFi) and non-fungible tokens (NFTs). In addition, Twitter Inc. may be laying the groundwork to allow for Bitcoin tips in its Tip Jar feature, according to a recent report from MacRumors. Meanwhile, El Salvador’s Bitcoin law takes effect September 7.
Whereas, the International Monetary Fund (IMF) warned that adoption of crypto assets such as Bitcoin as national currency can impact a country’s macroeconomic stability. The warning came ahead of the central American nation, El Salvador, officially adopting the world’s most popular decentralised digital currency, Bitcoin, as a legal tender from 7 September.
In a blog titled ‘Crypto assets as National Currency? A Step Too Far’, the IMF said, “Some countries may be tempted by a shortcut: adopting crypto-assets as national currencies. Many are indeed secure, easy to access, and cheap to transact. We believe, however, that in most cases risks and costs outweigh potential benefits."
Bitcoin hit a record of almost $65,000 in April. Supportive views from billionaire Elon Musk and the direct listing of digital-currency platform Coinbase Global Inc. fueled optimism.
(With inputs from agencies)
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