âTo the extent it is used I fear itâs often for illicit finance. Itâs an extremely inefficient way of conducting transactions, and the amount of energy thatâs consumed in processing those transactions is staggering,â the former Fed chairwoman said. Yellenâs comments have been cited as a reason for bitcoinâs recent losses. However, Yellenâs assessment of bitcoin as a inefficient medium of exchange is an important point and one that has already been raised in the past by bitcoin bulls. Using a volatile asset in exchange for goods and services makes little sense if the asset can tumble 10% in a day, or surge 80% over the course of a two months as bitcoin has done in 2021, critics argue. To put a finer point on it, over the past 12 months bitcoin has registered 8 corrections, defined as a decline from a recent peak of at least 10% but not more than 20%, and two bear markets, which are defined as falls of 20% or more, according to Dow Jones Market Data.
