By Hannah Boland Morgan Meaker and Margi Murphy
The price of Bitcoin plunged on Monday, wiping $10,000 (£7,120) from the cryptocurrency’s value in the space of just a few hours as the US Treasury Secretary called the coin “highly speculative” and “inefficient” for transaction.
Speaking at the DealBook D.C. Policy Project conference, Janet Yellen said: “Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that’s consumed in processing those transactions is staggering.”
Her comments came as the world’s most popular cryptocurrency crashed to under $48,000, cementing the coin’s reputation for erratic swings after reaching record highs over the weekend.
Yesterday, the coin rallied to a new record, reaching $58,354. But on Monday, Bitcoin dramatically dropped to $47,400 before eventually recovering to $54,385.
There was speculation among analysts over whether the dip was a reaction to a Tweet by Elon Musk on Saturday which suggested the coin was overvalued.
Bitcoin’s price descended further on Tuesday U.S. Treasury Secretary Janet Yellen and Tesla CEO Elon Musk weighed in on the cryptocurrency’s recent rally.
The world’s most valuable digital coin plunged 11% in 24 hours, sinking below $50,000 to trade around $48,080 at 11:30 a.m. ET, according to data from Coin Metrics. It had earlier fallen as much as 16% to hit an intraday low of $45,041.
Smaller digital tokens like ether and XRP also tumbled. Ether slipped 11% to $1,573, while XRP sank 17% to trade around 47 cents.
Bitcoin isn’t controlled by any central authority. So-called miners run high-power machines that compete to solve complex math puzzles in order to make a transaction go through. Bitcoin’s network consumes more electricity than Pakistan, according to an online tool from researchers at Cambridge University.
Yellen also warned about the risks for retail investors buying bitcoin.
“It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer,” the former Federal Reserve chair told CNBC’s Andrew Ross Sorkin at a New York Times DealBook conference.
The Telegraph, CNBC
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