The bitcoin price tumbled as much as 11% on Friday, putting the world’s biggest cryptocurrency on track for its worst weekly fall since the brutal sell-off of March 2020.
Bitcoin (BTC) fell as low as $44,200 on Friday morning, before regaining some ground to stand 6% lower at $45,936 at 4.30 a.m. ET on the Coinbase exchange.
The cryptocurrency had lost around 20.3% for the week on Friday in European trading hours. That would be the biggest weekly loss since a 33.5% decline shook bitcoin in March last year.
More than $150 billion has been wiped off the market since bitcoin hit a record high of $58,000 on Sunday and its market capitalization jumped above $1 trillion.
Nonetheless, the digital currency remained around 55% higher for the year on Friday.
A number of factors have weighed on bitcoin this week. Elon Musk appeared to trigger the sell-off by tweeting on Saturday that bitcoin and Ethereum’s cryptocurrency ether “seem high”. Musk has been a major player in the recent bitcoin rally, so his words carry weight with many investors.
The drop in the bitcoin price has also coincided with a broader pullback from the more expensive parts of the financial markets, including tech stocks and government bonds.
Some investors also fear that regulations are set to tighten around the cryptocurrency market.
US Treasury secretary Janet Yellen on Monday repeated her concerns about the misuse of bitcoin by criminals at the DealBook DC Policy Project, and said the amount of energy used in mining the currency “is staggering.”
However, most bitcoin enthusiasts are not fazed by the recent fall in the price. They argue that it is natural for a market to pull back after skyrocketing so quickly.
Matt Blom, head of trading at Nasdaq-listed crypto exchange group Diginex, told Insider that a buy-the-dip mentality should set in at around $45,000.
“We could well go from $45,000 to $42,000. But I think that $45,000 to $42,000 level at the moment is rock solid. People are very happy for the price to be there, because they get to buy it there. It’s just how the market works.”
Bitcoin rival ether has also suffered, falling dramatically from all-time highs of above $2,000 hit the previous week. The ether price (ETH) was down 9.9% on Friday morning to $1,458.