Bitcoin's price plunged on Monday after hitting new record high

Bitcoin's price plunged 7 percent until Monday evening after the world’s biggest cryptocurrency hitting another record high during the weekend to surpass US$60,000. 

Its price was around US$56,000 with a daily plunge of 7 percent on Monday. 

Before that, Bitcoin price hit over US$61,000 during the weekend with a new record high. It still stood about US$60,480 at noon Monday, an increase of 80 percent since the beginning of 2021 and 570 percent over the past 12 months, making the cryptocurrency the world’s sixth-biggest asset ahead of firms like Tencent, Facebook and Tesla. 

Investors bet on Bitcoin due to the US$1.9 trillion United States stimulus plan, the endorsements of listed firms and funds, and individual investors’ FOMO -- Fear of Missing Out -- sentiment.

The US stimulus bill has opened a new phase of financial optimism, buoying investors to seek new options like Bitcoin, said Du Jun, co-founder of Huobi, a Hong Kong-listed Bitcoin trading platform.

The rise of Bitcoin is an economic sideshow, but it will remain an “alternative” currency, a JP Morgan report said.

Its huge growth has been fueled by signs it is gaining acceptance among mainstream investors and companies like Tesla, Mastercard, BNY Mellon and Microstrategy.

The daily plunge on Monday and about 20 percent drop in February represent fluctuation of Bitcoin value, because investors became dubious of its lofty valuation, moving some leveraged players to cash out.

"Investors in the cryptocurrency should pay close attention to the macro investment environment, because it won’t continue to surge if financial optimism subsides," Du said.