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After the US Treasury Secretary Janet Yellen issued a warning about cryptocurrencies, the price of Bitcoin fell further on Tuesday.
According to data from Coin Metrics, the world’s most valuable digital coin plummeted 16% in the past 24 hours, falling below $50,000, trading as low as $45,389 at 4:1
Smaller digital tokens such as Ethereum and XRP also fell. Ether fell 15% to a price of $1,497, while XRP fell 21% and traded at approximately 45 cents.
On Monday, Yellen called Bitcoin a “very inefficient way of conducting transactions” and warned of its use in illegal activities. She also issued a warning about the environmental impact of Bitcoin. The crazy growth of tokens reminded some critics of the huge amount of electricity required to produce new tokens.
Bitcoin is not controlled by any central authority. The so-called miners run high-powered machines that compete to solve complex mathematical problems to make transactions go smoothly. Online tools from Cambridge University researchers show that the Bitcoin network consumes more electricity than Pakistan.
Yellen also warned of the risks of Bitcoin investing in retail investors on Monday.
The former chairman of the Federal Reserve told CNBC’s Andrew Ross Sorkin on the New York Times DealBook: “This is a highly speculative asset. I think people should be aware that it may be extremely volatile. I do worry about investment. Potential losses that the person may suffer.” Meeting.
Since the beginning of this year, Bitcoin has still risen by more than 60%, and price fluctuations of more than 10% are not uncommon in the crypto market. Bitcoin once climbed to nearly $20,000 in 2017, and then fell by 80% in the second year.
According to CoinDesk data, last week, the market value of digital coins reached US$1 trillion for the first time, although it has now fallen below US$900 billion. The news that Wall Street Bank and major companies such as Tesla and Mastercard are ramping up to cryptocurrencies have fueled this trend.
Tesla CEO Elon Musk said over the weekend that the price of Bitcoin and rival token ether “seems to be high.” Tesla announced earlier this month that it had purchased $1.5 billion worth of Bitcoin. On Monday, Tesla’s stock price suffered its biggest drop since September 23, 2020.
Bitcoin has always been attracted to mainstream investors, partly because people think Bitcoin is a store of value similar to gold. Bullish investors claim that this cryptocurrency can be used as a hedge against inflation.
But skeptics warn that Bitcoin has no intrinsic value and is one of the biggest market bubbles in history. JPMorgan analysts said last week that Bitcoin is an “economic show” and that crypto assets are seen as the “worst hedge” against a sharp drop in the stock market.