Bitcoin prices starts this week on a downward slide. After the hassle over the rollercoaster weekend, analysts note that the prices of BTC are going further down rather than recovering. Related to this downslide, Janet Yellen, Treasury Secretary, issues a warning report this Monday, February 22nd, asking investors to be more cautious as the leading cryptocurrency poses great dangers moving forward.
BTC is gradually making its way into the mainstream. Elon Musk’s recent announcement that his company, Tesla will be accepting payments in Bitcoin is a major push to that end. For the better half of 2020 and in 2021, Bitcoin has witnessed a surge of approximately 93%. Despite this week’s fall, BTC continues to trade above $53,000. This has a lot to do with the influx of institutional investors, and long-time retail investors into the crypto market. But Yellen doesn’t seem convinced with investors’ expectations from this digital coin.
Bitcoin Is Extremely Inefficient, Warns Yellen
In the report, she raises concern over issues like the stability and legitimacy of BTC. According to her, BTC cannot be a widely used mechanism of transaction. She further states that the most use that people get out of this digital asset is for “illicit finance”. She states that there are several reasons that make this coin inefficient and incompetent for conducting transactions.
Bitcoin mining is not an easy process. It requires participants to solve complicated mathematical equations with the help of high-powered digital setups. The mining of his single coin annually leaves a carbon footprint that is equal to the entire size of a nation like New Zealand, mentions Yellen. Other reasons like volatility, consumer concerns and so on also make Bitcoin an unsuitable alternative to the finance market contrary to the majority opinion.