Warning messages about bitcoin and cryptocurrency came out one after another from the Korean-US economic authorities. Although it is not directly connected to the time these statements were made, the price of bitcoin, which has been steadily hitting the highest since the beginning of this year, is also plunging by more than 14% from the previous day on the 23rd.
US Treasury Secretary Janet Yellen participated in the ‘2021 DealBook DC Policy Project’ hosted by the New York Times (NYT) on the 22nd (local time) and said, “Bitcoin is a very speculative tool and inefficient.” Warned against investing in Bitcoin.
“Bitcoin trading mechanism will not be widely used,” said Treasury Secretary Yellen. “Bitcoin is very inefficient to process transactions, and the waste of energy consumed in the transaction process is enormous.” He added, “Because it is difficult to track Bitcoin, it is often used for illegal activities, and money laundering is also performed.”
In Korea, Bank of Korea Governor Lee Ju-yeol said he could not understand the recent rise in bitcoin prices. He attended the National Assembly’s Planning and Finance Committee on the 23rd and said, “A crypto asset (cryptocurrency) is an asset that has no intrinsic value.”
On this day, the Democratic Party’s lawmaker Yang Hyang-ja said that the market capitalization of bitcoin exceeded $1 trillion (approximately 1110 trillion won), and asked Lee about the background of the bitcoin price surge. Governor Lee said, “Considering bitcoin as a means of hedge (avoiding) inflation, Tesla’s CEO Elon Musk (CEO) recently bought it in large quantities, and some financial institutions started bitcoin trading brokerage services. I understand.”
In the’Tesla 2020 Annual Report’ released on the 8th, electric car company Tesla announced that it bought a total of 1.5 billion dollars (about 1.6 trillion won) worth of bitcoin in January this year to efficiently manage corporate funds. When the news of Tesla’s purchase of bitcoin was delivered, the price of bitcoin, which had moved sideways at 39,000 dollars (about 43 million won) per piece, surged to 45,000 dollars (about 50 million won) in an instant.
A member of the Democratic Party, along with the employment staff, said, “Recently, stock trading funds have fallen sharply, and assets are moving to Bitcoin or cryptocurrency. Regarding this, President Lee diagnosed that there is a bubble in the current bitcoin price, saying, “It is difficult to understand why the price of bitcoin is so expensive. US Treasury Secretary Yellen also warned against cryptocurrency investment,” he diagnosed.
In addition, Kim Yong-beom, the first vice minister of the Ministry of Strategy and Finance, said at the macroeconomic and financial meeting that day, “As the abundant global liquidity moves in search of new means of storing value, the virtual asset (cryptocurrency) market is intensifying.”
Bitcoin price has plummeted after hitting a record high of $58,32 on February 22nd. At 6:30 pm on the 23rd, when the article was written, the bitcoin price is about $45,000, down 14% from the previous day.
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