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🌐 Janet Yellen: bitcoin is extremely inefficient and consumes too much energy
US Treasury Secretary Janet Yellen criticized bitcoin, claiming the high power consumption of miners and the lack of efficiency in transactions.
Janet Yellen made a number of comments during the DealBook DC Policy Project event. She noted that it is unlikely that Bitcoin is often used specifically for financial transactions.
“This is an extremely inefficient way of conducting transactions - the amount of energy required to process a transaction is simply amazing!” - said the US Treasury Secretary.
Yellen also touched upon the topic of state cryptocurrencies, noting that there are still many questions when creating national digital currencies. Including, the impact on the monetary policy of the state.
“What will be the consequences for the banking system? Will this lead to a massive outflow of deposits from banks to the Fed? Will the Fed itself have to work with retail consumers or outsource it to the banks? Is there a danger to financial stability? How will we fight money laundering and the criminal use of digital currency? There are many questions and problems to consider, but it is worth it, ”said Janet Yellen.
In early February, US Treasury Secretary Yellen expressed concern about the growing problem of using cryptocurrencies for criminal purposes.
🌐 Bitcoin (BTC) is now as valuable as 1 kg of gold
The popularity of Bitcoin is at an all-time high now, as Bitcoin is now as expensive as 1kg of gold. According Coingecko the last 24 hours maximum Bitcoin is $ 58,640, which was almost equal to the maximum of gold last week of $ 58,754.
On the early morning of Monday, February 22, the world's largest crypto asset was more expensive than gold, trading at more than $ 58,000 than $ 57,371 of gold. Bitcoin has now dropped to $ 53,700 at the time of writing, according to Coingecko.
According to Cryptowatch , Bitcoin ended the week with another strong weekly green candle that grew 18% and added $ 8,800 to its price. With a total market capitalization of $ 1.04 trillion, Bitcoin is now worth more than the entire Dutch stock market.
Bitcoin started 2021 at $ 28,990 and as of Sunday, February 21, it surpassed $ 58,000 amid growing acceptance by major investors and major companies. This means that the coin has already doubled this year and the $ 100K milestone is not unthinkable in 2021.
On January 7, Bitcoin broke the $ 40,000 barrier, and in the following days, it cost up to $ 42,000. After that, the coin kept hovering between $ 31,000 and $ 35,000, with peaks of up to $ 39,000. In the midst of this scenario, JP Morgan Chase analysts, in late January, predicted that Bitcoin could never exceed $ 40,000 due to weak institutional demand and the possibility of investors withdrawing their earnings.
But Bitcoin again proved its resilience and surpassed the $ 42,000 levels again on February 9 when the renowned electric car maker Tesla announced the purchase of $ 1.5 billion worth of Bitcoin. A week later, business intelligence firm MicroStrategy announced its plans to buy $ 600 million in Bitcoin, which was later increased to $ 900 million . This helped Bitcoin break above $ 50,000 and to a new all-time high (ATH) of $ 58,640 early Monday, February 22.
According to experts, with this growing acceptance by institutions, the gap between supply and demand is widening, suggesting a further increase in prices. Skybridge Capital founder and managing partner Anthony Scaramucci, in an interview with CNBC last week, said that this gap would help BTC achieve the $ 100,000 milestone before the end of 2021. Anthony commented:
“I think we will see $ 100,000 in this coin before the end of the year… It's just a supply and demand situation. There is not much supply and a very high demand ”.
🌐 Tesla has made more than a billion dollars thanks to Bitcoin
And it is that, recently the main automotive company in the world, Tesla, announced the investment of 1,500 million dollars of its cash reserve in Bitcoin. In what became the highest-profile cryptocurrency purchase since the MicroStrategy move. Driving a substantial increase in the price of the cryptocurrency.
Tesla has made more than a billion dollars thanks to Bitcoin. Source: CoinDesk
Something that has not only put Elon Musk's company in the media eye. If not, it has also generated great profits. Thus, Wedbush Securities analyst Daniel Ives calculates that Tesla has generated more than a billion dollars in profits in recent days thanks to its investment in BTC. Which would put the company on track to generate higher revenue from Bitcoin than from 2020 electric car sales.
" Although investing in Bitcoin is secondary to Tesla, it is clear that it has been a good initial investment and a trend that we hope can have a ripple effect for other public companies in the next 12 to 18 months, " commented Ives.
Thus, the profits generated by Tesla in record time thanks to Bitcoin, could open the door to the massive entry of institutional companies in Bitcoin. An event that many analysts hope will begin to occur in the coming months.
🌐 Price turbulence in the market: Bitcoin and Ethereum recede
After a bullish weekend, the market registered a price turbulence, Bitcoin and Ethereum fell during this day.
Bitcoin's price fell below $ 50,000 in a major correction on Monday just before the US market opened. Earlier today there was a price turbulence in the crypto market, BTC for example, registered a drop of around 15%.
The downward price movement came after Bitcoin hit new all-time highs above $ 58,300 over the weekend.
This pullback, which many anticipated when 28,000 BTC were deposited in Gemini, also caused other cryptocurrencies to fall in time with Bitcoin.
In this sense, the entire market followed the fall of the main cryptocurrency in the market. Therefore, a price turbulence continued to be experienced.
Ethereum is down 8.74% in the last 24 hours according to our internal Crypto Online tool . Trading at $ 1,740 after falling to $ 1,546, while Bitcoin is trading at $ 53,000 registering a variation of -6.75%.
🌐 Chinese Bitcoin mining, threat or opportunity?
In the entire world there is no country that has greater influence over the world of cryptocurrencies than China. Despite the fact that, initially, the Asian giant implemented extraordinary measures to prevent the emergence of crypto-asset exchanges in its territory. Going even to expel Binance from the country. In recent years the number of mining farms has been increasing in Chinese territory.
This has been helped by low electricity costs in the Asian country, as well as a permissive policy on the part of the government with respect to mining. Supporting the dominance of the network by its miners, although without tolerating that Bitcoin is used as a replacement for the Chinese yuan.
The result of these factors has been the concentration of more than 65% of the mining power of the Bitcoin network in Chinese mining farms. Which provides these companies with practical control over the BTC Blockchain. Possessing more than 51% of its computing power, and therefore being able to influence it. Something that represents a significant risk for investors according to Harald Malmgren:
“ If 2/3 of the world's Bitcoin mining is done in China, doesn't that suggest high political risk for both individuals and institutional Bitcoin investors? ».
In this way, Malmgren points to the risk that the union of Chinese mining farms would represent, either autonomously or by order of the government. Which would allow them to manipulate operations on the Bitcoin Blockchain at will. A result that, although not given so far, should serve users as a warning against the concentration of mining power.
🌐 Aave and Yearn will deepen their partnership
The first post by a Yearn member is posted on the Aave forum. Lehnberg from the Yearn community posted a proposal on the Aave forum to discuss further relationships between two teams.
The proposed partnership covers various parts, from the YFI token to the Yearn treasury and the native credit delegation for the Yearn vaults. Lehnberg suggests that three actions must be taken together to positively impact the ecosystem of Aave and Yearn.
Partnerships between DeFi platforms always mean more services and opportunities for end users. When two teams and communities work with each other, they can benefit from each other's characteristics.
Yearn and Aave have been working together before and are now looking for new ways to expand the partnership. The first post by one of Yearn members on the Aave forum signifies a considerable step towards deepening partnerships. It is a proposal focused on three critical areas on both platforms.
The latest proposal on Aave details three steps to deepen the partnership with Yearn. The first deals with the deactivation of YFI as a loan asset. It is focused on preventing shoring attacks and increasing the utilization of Aave within Yearn products. Two other steps in the proposal are to extend a 3% fixed rate line to Yearn's Treasury and allow Aave's LPs to delegate to Yearn's vaults.
Disabling YFI as a loan asset has multiple results for the Aave community. It will make Aave more competitive. In other words, when the risks of governance and short-circuit attacks are eliminated, Aaave can compete with Maker and gradually become the preferred place to deposit YFI as collateral. Also, the demand for YFI will increase and there will be a low cost for Aave to do so.
Enabling access to native credit delegation for Yearn vaults is another essential part of Aave's latest proposal. Lehnberg details the steps:
“Yearn has supported Aave's credit delegation functionality since it was released through yborrow.finance and more recently yDelegate, which has yet to be released. Native Credit Delegation, a feature that is part of Aave v2, allows LPs to delegate directly to Yearn vaults from Aave's own interface.
Each part of the latest proposal to deepen the partnership between Aave and Yearn has some requirements. If community members vote for the latest proposal, YFI will not be available as a loan asset to Aave users.
The native credit delegation part requires some minor technical steps, such as developing an interface with a deposit and withdrawal calls for vaults. Yearn will make this possible for Aave and other partners with a Yearn SDK in development.