A woman walks past a Bitcoin exchange shop.
Artur Widak | NurPhoto | Getty Images
Bitcoin slips after Federal Reserve Chairman Jerome Powell criticized Facebook's plan to launch a cryptocurrency.
The world's best-known digital coin – which shot off steam in 2019 – dropped 12 percent to about $ 11,300 on Thursday, according to data from CoinDesk.
Bitcoin hit a 17-month high of over $ 13,000 just two weeks ago. It is currently up nearly 200% since the beginning of the year, after major companies like Facebook and Fidelity have launched into space.
But he began slipping when Powell said he had serious concerns about the Digital Scale planned by Facebook, Libra. The social network is looking to launch the token alongside a consortium of companies including Uber and Visa.
"Libra raises serious concerns about privacy, money laundering, consumer protection and financial stability," Powell told a congressional committee on Wednesday. "These are concerns that need to be addressed in depth and publicly."
The Facebook Balance takes the form of what is called a stablecoin. These are crypto-currencies often attached to currencies like the dollar. In the case of Libra, the token is supported by a group of currencies and government debt.
Analysts have been optimistic about Libra, at least from the point of view that it could pave the way for increased adoption of cryptocurrencies. But the project led by Facebook has been overshadowed by regulatory concerns, with central bankers and politicians around the world expressing skepticism.
"It looks like the market is not yet ready for new heights and (bitcoin) is nearing the bottom of its last range" of $ 10,000 to $ 14,000, said Mati Greenspan, Senior Market Analyst at eToro . CNBC by email Thursday.
Greenspan added that he did not know if cryptographic traders were monitoring Powell's comments. "This kind of volatility is perfectly normal for Bitcoin," he said.
Bitcoin was not the only virtual currency to give up following Powell's comments. The second and third largest cryptocurrencies in the world – Ether and XRP – have also fallen. Ether was down 13 percent to $ 270 a chip, while the XRP dropped 15 percent to about 33 cents.