Bitcoin highly speculative, extremely inefficient for transactions, says Yellen

A woman buys Bitcoin at Bitcoin Change in Tel Aviv, Israel, on Jan. 8, 2018. (Xinhua/Gil Cohen Magen)

WASHINGTON, Feb. 22 (Xinhua) -- U.S. Treasury Secretary Janet Yellen warned on Monday that Bitcoin is a highly speculative asset and extremely inefficient for conducting transactions.

"It is a highly speculative asset and you know I think people should be aware it can be extremely volatile and I do worry about potential losses that investors can suffer," Yellen, a former chair of the Federal Reserve, said at a New York Times DealBook conference.

"To the extent it is used, I fear it's often for illicit finance. It's an extremely inefficient way of conducting transactions, and the amount of energy that's consumed in processing those transactions is staggering," Yellen said.

Yellen's warning came as Bitcoin tumbled as much as 17 percent to below 48,000 U.S. dollars on Monday after hitting a record above 58,000 dollars over the weekend.

While market capitalization of Bitcoin topped 1 trillion dollars on Friday, the leading cryptocurrency is still far from becoming a mainstream investment asset, bringing risks of overvaluation and price volatility, according to multiple investment advisory firms.

"The reality is nobody knows what the value of this pseudo-asset is. It doesn't have any value cause it doesn't have any income, doesn't have any use, doesn't have any utility. So it's a speculative play on a bubble that is self-fulfilling," renowned economist Nouriel Roubini told Yahoo Finance Live on Monday.