Janet Yellen Says Bitcoin is ‘Inefficient for Transactions and Speculative’

Janet Yellen, the United States Treasury Secretary, has condemned Bitcoin’s technological prowess, describing the cryptocurrency as highly speculative and inefficient in transactions. 

Yellen made her comments known today at the 2021 DealBook DC Policy Project, an event moderated by New York’s The Times’ Andrew Ross Sorkin, which features debate from top policymakers and business leaders suggesting ways to move the U.S. and the world forward. 

Despite the opportunities associated with Bitcoin, the former chief of the U.S. Federal Reserve noted that the digital currency’s use in payments is ineffective because of the high energy consumption involved in processing its transactions. 

Bitcoin Dips Below $50,000 

Yellen’s negative comment possibly affected the price of Bitcoin, as the largest cryptocurrency by market cap, which traded above $58,000 earlier today, plummeted below $50,000 for the first time in four days. 

Bitcoin dipped by roughly 16%, while Ether (ETH) alongside other cryptocurrencies suffered a similar fate. 

Bitcoin has since recovered from the devastating blows caused by a combination of profit-taking and Yellen’s comments, with the cryptocurrency back above $50,000 again across major cryptocurrency exchanges. 

Yellen Supports Digital Dollar

While Yellen is clearly not a fan of Bitcoin, she urged the U.S. Federal Reserve to adopt the technology that powers the cryptocurrency – the blockchain – in developing a digital dollar. 

According to Yellen, issuing a blockchain-based dollar could provide lots of opportunities for the U.S. payment industry, which she believes would surpass its existing payment system. 

“[A digital dollar] could result in faster, safer, and cheaper payments,” she added.

Bitcoin’s Been Receiving Backlashes Since 2013

Bitcoin is no stranger to criticism from top traditional financial experts. Right from the time Bitcoin became a dominating force in 2013, the cryptocurrency has received several backlashes from various quarters, with many believing that the cryptocurrency would soon fade-off. 

Last month, European Central Bank (ECB) president Christine Lagarde blasted Bitcoin for facilitating illicit transactions over the years while describing the cryptocurrency as a highly speculative asset. 

She noted that in order to mitigate BTC’s use in illicit businesses, the cryptocurrency would have to be regulated globally. 

Despite the negative comments about Bitcoin, the cryptocurrency has continued to soar, and it remains the best performing financial instrument in recent times.