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Prices for Bitcoin and other cryptocurrencies fell on Tuesday after a stern warning from Treasury Secretary Janet Yellen.
“It’s an extremely inefficient way to conduct transactions, and the amount of energy consumed to process those transactions is staggering,” Yellen said in an interview with The New York Times Dealbook Monday night. This is not the first time she has criticized cryptocurrency, which she says is often used for illegal transactions.
However, Yellen also said that digital currencies are likely to stay and that a “digital dollar” could serve as a simpler payment system for many Americans who do not have this access.
The price of bitcoin BTCUSD,
was the latest 14% drop to $ 47,891, a level it hasn’t seen for about a week, but it’s still up 73% so far this year. The losses weren’t limited to bitcoin, with the prices of ether, the currency that runs at the top of the ethereum ETHUSD,
platform, off 20% and for XRP XRPUSD,
which is pegged to Ripple, down 22%.
The former Federal Reserve Chairman has made it clear since her takeover of the Treasury that her department will take a close look at bitcoin, with possible regulation to come.
She is only a “temporary stopper,” said Stephen Innes, Chief Global Markets Strategist at Axi, in a note to clients. “Besides the huge interest of the Middle East consortium in trading bitcoin ETFs on the Toronto Stock Exchange which needs to physically hedge, but if companies start adding physical coins to the balance sheet this year, that’s the panacea that is a game-changer, ”he said.
Bitcoin recently surpassed $ 1 trillion in market value for the first time, and the big moves seen this year have attracted more investors and interest from companies such as electric car maker Tesla TSLA,
which earlier this month revealed a $ 1.5 billion investment in Bitcoin and plans to accept it as payment in the future. And the credit card giant Mastercard MA,
also said it would allow traders to accept certain cryptocurrencies on its network later this year.
Read: Tesla’s Bitcoin gambit has already made $ 1 billion, more than 2020 profit from car sales, analyst says
But bitcoin had a volatile start to the week, dropping on Monday in a move some blamed on Tesla TSLA,
Managing Director Elon Musk. Over the weekend, he tweeted that “BTC and ETH look high lol” in response to Euro Pacific Capital CEO Peter Schiff, who has defended gold against bitcoin. “Gold is not BS. It’s real money and better than both!
This back and forth 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 have deduced from his dismissal of the comment. This emoji has been banned by social media group Facebook on its Instagram unit because of phallic symbolism and food.
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