There was a slump in the value of Bitcoin, after US Federal Reserve Chairman Jerome Powell said that investing in cryptocurrencies, a speculative asset, is highly risky. He also stated cryptocurrencies can be a substitute for gold rather than for the dollar.
According to Coindesk, the 24-hour low of the Bitcoin was USD 51,549.91 per piece (at 11.43 am IST).
Even though there was a slight spike in the valuation even after the statement made by Powell, the spike did not continue. The sudden rise in Bitcoin can be attributed to Tesla's founder Elon Musk. He said the company's electric vehicles can now be bought using Bitcoin and the option will be available outside the United States later this year.
It is expected that Powell’s statement will have an impact in cryptocurrencies especially on Bitcoin for sometime.
At 11.50 am, other digital currencies like Ethereum, XRP, Stellar, and Chainlink were down by 4.26 per cent, 7.45 per cent, 6.65 per cent, and 4.66 per cent respectively.
The US Federal Reserve like some other central banks, are also looking at digital currency but with caution. Most central banks are considering digital currency as an answer to cryptocurrencies.
