Bitcoin and other cryptocurrency prices plummeted on Tuesday after a strong warning from Treasury Secretary Janet Yellen.
“It is an extremely inefficient way of conducting transactions, and the amount of energy consumed in processing these transactions is impressive,” Yellen said in an interview with the New York Times Dealbook on Monday night. It is not the first time that she has criticized cryptocurrency, which she said is often used for illegal transactions.
However, Yellen also said that digital currencies are probably here to stay and that a “digital dollar” could serve as an easier payment system for many Americans who do not have such access.
The price of bitcoin BTCUSD,
The last drop was 14% to $ 47,891, a level that has not been seen in about a week, but is still up 73% so far this year. The losses were not limited to bitcoin, with the prices of ether, the currency that runs on top of the ETHUSD ethereum,
platform, with 20% discount and for XRP XRPUSD,
which is tied to Ripple, down 22%.
The former Federal Reserve chairman has made it clear, since taking over the Treasury, that his department will closely scrutinize bitcoin, with possible regulation to come.
It is just a “temporary obstacle,” said Stephen Innes, Axi’s chief global markets strategist, in a note to customers. “In addition to the huge interest of the Middle East consortium in trading bitcoin ETF on the Toronto stock exchange, which needs to do physical hedging, but if companies start adding physical currencies to the balance sheet this year, this will be a game-changing panacea” , he said.
Bitcoin recently surpassed $ 1 trillion in market value for the first time, and big moves seen this year have attracted more investors and interest from companies like electric car maker Tesla TSLA,
who revealed earlier this month a $ 1.5 billion investment in bitcoin and plans to accept it as payment in the future. And the credit card giant Mastercard MA,
he also said he would allow traders to accept some cryptocurrencies on his network later this year.
Reading: Tesla’s bitcoin strategy has already made $ 1 billion, more than 2020 profit from car sales, analyst estimates
But bitcoin got off to a volatile start for the week, dropping on Monday in a move that some attributed to Tesla TSLA,
Chief Executive, Elon Musk. Over the weekend, he tweeted that “BTC and ETH look high lol” in response to Euro Pacific Capital chief executive Peter Schiff, who defended gold instead of bitcoin. “Gold is not BS. It is real money and better than both! “
The comings and goings between Musk and Schiff continued on Tuesday, with the latter criticizing the CEO’s bitcoin approach to the electric car. Musk responded with an eggplant emoji, which some inferred was his way of rejecting the comment. This emoji was banned by the social media group Facebook on its Instagram unit because of phallic symbolism and food.