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Topics: News, US News, World News, Donald Trump
Kit Roberts
Topics: News, US News, World News, Donald Trump
The US Treasury has issued a serious warning after the price of Bitcoin dropped significantly over the course of just a few hours.
Bitcoin has reached another low, with the value dropping by 11 percent to around $67,000, meaning it is now worth less than when Donald Trump was elected to the White House for the second time, according to AP.
In October 6 last year, Bitcoin hit a record high of $126,210.50, according to crypto trading hub Coinbase, but since then it has lost nearly half of its value.
Bitcoin initially surged after Trump's election in November 2024, partially due to an anticipation of a more crypto-friendly government in Washington.
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Now, the continued challenges faced by the currency have led to some wondering about its future.
Investor Michael Burry has warned that continued decline might even 'set in motion a death spiral leading to massive value destruction'.
Writing on Substack, he said: "Bitcoin has been exposed as a purely speculative asset, and is not near the debasement trade hedge that gold and other precious metals are."
Now, the treasury has warned that they 'do not have the authority' to intervene in the cryptocurrency market as its value continues to decline.
The House Financial Services Committee met on Wednesday in a session, which saw Treasury Secretary Scott Bessent signal that the treasury would not be willing to intervene.
Bessent said: "I do not have the authority to do that, and as chair of FSOC, I do not have that authority."
The latest drop represents the first time that Bitcoin has fallen below $70,000 in some 15 months, according to CNN.
But despite the value dropping, Bitcoin is still a notably volatile market and it has experienced similar slumps in the past.
However, some have speculated that this slump has come at a time when the currency should have everything going for it as Trump has frequently signalled his support for cryptocurrencies.
Nonetheless, cryptocurrencies have recovered from big drops in value in the past.
Back in 2014, the price of cryptocurrencies saw a massive crash when hackers got into cryptocurrency exchange Mt. Gox.
Even this wasn't the largest drop for bitcoin either, as in 2018, it plummeted in value by a whopping 74 percent as investors became concerned about a huge number of new initial coin offerings.
Both 2021 and 2022 also saw crashes, but the currency has continued to bounce back each time.