Costfoto | Barcroft Media | Getty Images
Bitcoin The price fell further on Tuesday after U.S. Treasury Secretary Janet Yellen issued a cryptocurrency warning.
According to data from Coin Metrics, the world’s most valuable digital coin has plunged 16% in the past 24 hours, dropping below $ 50,000 to trade as low as $ 45,389 at 4:10 am ET.
On Monday, Yellen called Bitcoin a “extremely inefficient way of transactingAnd warned against its use in illicit activities. She also sounded the alarm about the impact of bitcoin on the environment. reminded some critics of the level of electricity needed to produce new parts.
Bitcoin is not controlled by any central authority. The so-called miners use high powered machines that compete with each other to solve complex mathematical puzzles in order to complete a transaction. Bitcoin’s network consumes more electricity than Pakistan, says online tool researchers from the University of Cambridge.
Yellen also warned on Monday of the risks of investing in bitcoin for retail investors.
“It’s a highly speculative asset and you know I think people need to be aware that it can be extremely volatile and I’m worried about the potential losses investors may take,” said the former chairman of the Federal Reserve to CNBC’s Andrew Ross Sorkin in a New York Times DealBook. conference.
Bitcoin is still up over 60% since the start of the year, and price fluctuations of over 10% are not a rarity in the crypto markets. Bitcoin once climbed to nearly $ 20,000 in 2017 before losing 80% of its value the following year.
The digital room first hit $ 1 trillion in market value for the last time week – although it has now fallen below $ 900 billion, according to CoinDesk. It was spurred on by news from Wall Street banks and big companies like You’re here and MasterCard warming to cryptocurrencies.
Elon musk, Tesla CEO, said over the weekend that the prices of bitcoin and rival token ether “seems high“This follows Tesla’s announcement earlier this month that it had bought $ 1.5 billion worth of bitcoin. Tesla shares suffered its biggest fall since September 23, 2020 Monday.
Bitcoin has caught the attention of mainstream investors, in part because of the perception that it is a store of value similar to gold. Bullish investors claim that cryptocurrency can act as a hedge against rising inflation.
But skeptics warn that bitcoin has no intrinsic value and is one of the biggest market bubbles in history. Last week, JPMorgan analysts said bitcoin was a “economic side showAnd that crypto assets rank as the “poorest hedge” against large drops in stocks.