Bitcoin slid Feb 23 after a bout of volatility highlighted lingering doubts about the durability of the token’s mesmerising rally.

The cryptocurrency fell as much as 9.7% to below US$50,000. At one point Monday the digital currency plunged 17% before paring the worst of the slide. It’s still up some 400% in the past year, a rise that dwarfs other assets.

Treasury Secretary Janet Yellen and Microsoft Corp. co-founder Bill Gates were the latest to weigh into a debate over the digital coin. Gates cautioned about how investors can be swept up in manias, while Yellen said Bitcoin is an “extremely inefficient way of conducting transactions”.

In the background are jitters that the global economic recovery from the pandemic will eventually prompt central banks to dial back easy-money policies that helped propel Bitcoin higher. At a technical level the digital currency looks stretched, according to Miller Tabak + Co.

A monthly relative-strength index for Bitcoin is “extremely overbought,” the company’s chief market strategist Matt Maley wrote in a weekend note.

Gates and Yellen muscled in on a Bitcoin discussion that of late had been dominated by Tesla Inc. Chief Executive Officer Elon Musk. In recent tweets, Musk said Bitcoin prices “seem high,” having earlier called it a “less dumb” version of cash.

Tesla this month disclosed a US$1.5 billion investment in Bitcoin, while MicroStrategy Inc. boosted a sale of convertible bonds to US$900 million to buy even more of the token.

Bitcoin faithful argue the digital currency emerging as a hedge for risks such as faster inflation and set to win more attention from corporate treasurers and institutional investors. Others see speculators playing a bigger role and some echoes of the digital coin’s 2017 boom and bust.

“It’s a pure speculative asset,” said Nader Naeimi, head of dynamic markets at AMP Capital Investors in Sydney.

A pullback in Bitcoin shouldn’t be surprising “given the current overleveraged long positions on mainstream coins,” said Annabelle Huang, a partner at Amber Group, a crypto financial-services firm.

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