Points to Focus on
- Bitcoin kept falling on Wednesday, dropping below s $50,000
- Janet Yellen, the US Secretary of Treasury said bitcoin is “extremely inefficient” and may be used in criminal activity
- After reaching $1 trillion market cap for the first time in history, bitcoin is currently less than $900 billion
Bitcoin’s price kept falling on Wednesday as the US Secretary of Treasury said bitcoin is “extremely inefficient” and may be used in criminal activity. In addition, Tesla CEO and founder Elon Musk weighed in on the crypto asset’s latest rally.
The world’s most popular digital asset lost 11% in 24 hours, falling below $50,000 and even reached $48,080. It had earlier dropped 16% to touch the low of $45,041.
Bitcoin’s fiasco was followed by its rivals – ether and ripple which also lost value. Ether slipped 11% to $1,573, and ripple slipped 17% and traded for 47 cents.
Janet Yellen said bitcoin was an “extremely inefficient way of conducting transactions” and suggested users be careful as the digital asset may be used in illicit activity. She also shared her worries about bitcoin’s effect on the environment. The coin’s crazy rally has made critics talk of the huge amounts of electricity required to create new coins.
Since Bitcoin is decentralized and not controlled by any specific authority, its miners use high-power machines that are intended to solve compound math puzzles, so that the transactions could go through flawlessly. Bitcoin’s network consumes more electricity than Pakistan, according to researchers.
Yellen also reminded of 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,” said Andrew Ross Sorkin, the former Federal Reserve chair at a New York Times DealBook conference.