Bitcoin hit a few speed bumps this week, slowing down the momentum it gained after its positive reception by the Senate in mid-November.
China, the Bank of France, and Former Federal Reserve Board Chairman Alan Greenspan all warned about the risks and volatility inherent in the digital currency Thursday, sending its value plummeting.
Chinese authorities restricted Bitcoin transactions at Chinese banks, on the same day the Bank of France warned traders of the high-risk nature of the virtual money, reports the The Wall Street Journal. Officials cited concerns over fraud and financial stability.
“Even if Bitcoin does not today meet the conditions to become a credible means for investment that could therefore threaten financial stability, it represents a clear financial risk for those that hold it,” the Bank of France stated in a report.
Bitcoin’s value dropped 30 percent from a record high of $1,240 to $870.
Greenspan said the digital currency is not money, in an interview with Bloomberg Television.
“It’s a bubble,” Greenspan said. “It has to have intrinsic value. You have to really stretch your imagination to infer what the intrinsic value of Bitcoin is. I haven’t been able to do it. Maybe somebody else can.”
Bitcoin’s value reached a milestone last week when it hit a record high following following the two Senate hearing on the digital money, which said Bitcoin is a “legitimate financial instrument.”
A New York Times article Thursday said that Bitcoin is the equivalent of the “financial wild west,” without rules or regulation to prevent fraud and government activity. Although the virtual money is becoming more mainstream, it will likely be viewed as “suspicious” until it becomes more stable.