The price of Bitcoin plunged on Monday, wiping $10,000 (£7,120) from the cryptocurrency’s value in the space of just a few hours as the US Treasury Secretary called the coin “highly speculative” and “inefficient” for transaction.
Speaking at the DealBook D.C. Policy Project conference, Janet Yellen said: "Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that's consumed in processing those transactions is staggering."
Her comments came as the world's most popular cryptocurrency crashed to under $48,000, cementing the coin's reputation for erratic swings after reaching record highs over the weekend.
Yesterday, the coin rallied to a new record, reaching $58,354. But on Monday, Bitcoin dramatically dropped to $47,400 before eventually recovering to $54,385.
There was speculation among analysts over whether the dip was a reaction to a Tweet by Elon Musk on Saturday which suggested the coin was overvalued.
That's it for this evening
See you back here tomorrow for more technology news!
Spotify says it can recommend podcasts based on music tastes
Gustav Söderström, Spotify's head of research and development revealed that the company is working on making its discovery function just as effective for its podcasts, as it is for its music.
"Turns out that we can even predict what kinds of podcasts listeners might enjoy based on their taste in music," he said during the company's annual investor conference.
The company also announced a number of tweaks to the platform, including better tools for bedroom artists to create music, improved playlists and a launch in 80 new countries, including Asia, Africa, Caribbean and Europe. It is launching in 26 new languages.
Some of the new markets, including Bangladesh, Pakistan and Nigeria, have some of the biggest emerging internet audiences in the world. Spotify believes it could find 1bn additional users in these markets.
First promised in 2017, the HiFi subscription for Spotify will launch this year, offering better audio quality for a premium. HiFi will "deliver music in CD-quality, lossless audio format to your device and Spotify Connect-enabled speakers," the company said, without disclosing prices or the countries for launch. Rivals Tidal and Deezer already offer HiFi.
Spotify reveals massive surge in podcasts
Spotify revealed that the amount of people listening to podcasts has soared by 1,5000pc in three years and expects the trend to continue upward.
The digital music library has ramped up its catalogue since 2019, buying Gimlet, Parcast, Anchor, Ringer and Megaphone - costing the company more than $400m. It now has 2m podcasts available to stream.
It has also secured deals with controversial host Joe Rogan, Barack and Michelle Obama and Prince Harry and Meghan.
In its annual investors' event, streamed online this year, it said it had predicted early on "that we could transform the podcast industry the way we did with music".
Joe Budden, one of Spotify's largest exclusive podcasters, left the company this year in favour of Patreon after claiming it was "pillaging" his audience.
Janet Yellen slams Bitcoin as cryptocurrency crashes
The price of Bitcoin plunged on Monday, wiping $10,000 (£7,120) from the cryptocurrency's value in the space of just a few hours as the US Treasury Secretary called the coin "highly speculative" and "inefficient" for transaction.
“I don’t think that Bitcoin is widely used as a transaction mechanism,” Janet Yellen said, speaking at a New York Times conference.
She added: "Bitcoin is an extremely inefficient way of conducting transactions and the amount of energy that's consumed in processing those transactions is staggering."
Her comments came as the world's most popular cryptocurrency crashed to under $48,000, cementing the coin's reputation for erratic swings after reaching record highs over the weekend.
On Sunday, the coin rallied to a new high, peaking at $58,354. But the following day, the coin dropped dramatically to $47,400 before eventually recovering to $54,385.
The second largest cryptocurrency Ether, which has a habit of tracing Bitcoin's price spikes, also dropped 10pc on Monday after reaching its own record of $2,040 over the weekend.
"The sell off across the board today is a result of some of last week's exuberance easing, as well as a much needed unwinding of over-leveraged long positions," said Ross Middleton, co-founder of cryptocurrency exchange DeversiFi.
"The market sentiment is still very positive and with no significant macro changes I expect Bitcoin and Ethereum to continue to bounce and be very bullish this year."
Analysts have also suggested individuals trading the cryptocurrency at home play a role in volatile weekend rallies.
But there was speculation over whether Monday's price drop was linked to institutional cryptocurrency traders arriving at work and responding to a social media post by Elon Musk which suggested the coin was overvalued.
On Saturday, Musk Tweeted that Bitcoin prices “seem high.”
The Tesla CEO and cryptocurrency advocate has demonstrated enormous influence over Bitcoin's price, sparking a rally when it was disclosed Tesla had invested $1.5bn in the coin.
The company's investment was echoed by endorsements by other mainstream companies and investors, including Mastercard and BNY Mellon.
"The drop itself wasn’t surprising – institutional flows have been underpinning Bitcoin’s rise over the last few months, and we came out of the weekend overbought, so at least a small correction was expected," said Joseph Edwards, head of research at London-based cryptocurrency brokerage Enigma Securities.
"Today was a classic case of what's known as a 'liquidation spiral' - these are markets that are often traded on heavy leverage, and as a result, relatively small moves can tend to turn into sharper shocks. Minus 10pc in as many minutes is a constant feature and risk of crypto markets."
In a note last week, Nikolaos Panigirtzoglou, a strategist at JPMorgan Chase & Co warned that Bitcoin was facing price turbulence as market liquidity falls.
"Market liquidity is currently much lower for Bitcoin than in gold or the S&P 500, which implies that even small flows can have a large price impact," he said.
Microsoft sides with EU publishers in Facebook-Australia row
Microsoft has announced its participation in an European arbitration system, designed to ensure news outlets are paid fairly for the use of their online content.
The system is to be designed in a similar way to Australia's new media code, which requires big tech companies to agree a payment with news organisations or to let an arbitration panel decide an amount.
Microsoft's endorsement of Australia's proposals last week combined with the company's participation in the European system will be seen as an attempt to differentiate itself from big tech companies like Facebook and Google which have pushed back against the measures.
My colleague Hannah Boland has the full story.
Downing Street expresses concern over Facebook-Australia stand off
Downing Street has said it is "concerned" about Facebook's decision to block news content from its platform in Australia.
In response to a draft law that would force Facebook to pay news outlets for content, the platform blocked links to all news content as well as government and emergency department accounts.
"We are obviously concerned about access to news being restricted in Australia," the Prime Minister's official spokesman told a Westminster briefing on Monday.
"As we always have done, we will be robust in defending free speech and journalism.
"And as you know are setting up a Digital Markets Unit to promote competition in digital markets and ensure major tech companies cannot exploit dominant market positions.
"The Digital Markets Unit will be established within the Competition and Markets Authority from April and we will consult on proposals on its form and function later this year."
Total traffic to Australian news sites from within the country has fallen by around 13pc, according to data from analytics company Chartbeat. Total traffic coming to those sites from outside Australia has dropped by around 30pc.
The spokesman added that Culture Secretary Oliver Dowden is expected to meet executives from Facebook this week.
Huawei reveals new foldable phone
Huawei has revealed its latest foldable phone, hoping to boost demand after new data released today revealed the company's smartphone sales had plunged 41pc due to US imposed sanctions.
Huawei’s Mate X2 has an 8-inch screen when opened out and according to the company, the phone will be one of the first to be updated to Huawei's own operating system from April.
Foldable phones are making a comeback, with Samsung and Motorola also releasing models in the past year.
Roblox revives IPO plan
Video games empire Roblox has revived plans to go public, after delaying an IPO last year over tech bubble fears.
In December, reports surfaced that executives at the company were rattled by share spikes that followed Airbnb and Doordash's market debuts.
According to a regulatory filing published on Monday, those fears have since subsided and the company expects its shares to start trading on the New York Stock Exchange on March 10.
Read my colleague Laurence Dodds' feature on how Roblox built an empire loved by millions of children.
In January, the company was valued at $29.5 billion (£21 billion).
Chinese hackers cloned NSA spyware
Cyber tools developed by the US National Security Agency (NSA) have fallen into the hands of Chinese hackers and been used to attack US targets, according to a new report.
On Monday, cyber security firm Check Point released a report which described features in a piece of China-linked malware as a "replica" of NSA break-in tools which were leaked in 2017.
This is not the first time government malware has been replicated, said Check Point. Instead it represents an ongoing trend where countries that develop malware can see their code leaked and used against them at a later date.
Bitcoin slides 6pc on Monday
The world's most popular cryptocurrency fell more than 6pc on Monday, after surging to record highs the previous day.
Analysts said the dip was not linked to any specific news events but instead reflect a new trend where weekend rallies are proving not to be sustainable.
Bitcoin was last trading down 4.4pc at $54,941. Another cryptocurrency, ether, also fell 7pc to $1,798 after reaching a new record on Saturday.
Cryptocurrency advocate Elon Musk, who sparked a rally after his company Tesla invested $1.5bn in Bitcoin, admitted on Saturday the current price seemed high.
Apple unseats Samsung as world's biggest smartphone seller
Apple has surged back to the top spot as the world's biggest smartphone seller, Matthew Field writes, replacing South Korea's Samsung as it sold an estimated 80m new iPhones in the final three months of 2020.
The launch of the first 5G iPhones late last year triggered a rush of sales as consumers upgraded to the devices capable of faster download speeds. Apple took hold of just under 21pc of the global smartphone market. Samsung, the second biggest seller of the three month period, sold 62m phones.
Overall in 2020, the global smartphone market shrank 12.5pc, according to data from analysts Gartner as the pandemic hit consumer demand.
While sales of Samsung fell 14.6pc year-on-year and Huawei phone sales crashed 24pc, Apple increased its sales by 3.3pc, selling an estimated 200m phones over the 12 months.
Huawei's numbers tumbled as it became harder to shift the devices in Western markets after a US blacklisting effectively stopped the Chinese smartphone maker from using the latest software from Google. Huawei was forced to build its own software and stop using Android and its app store.
Analysts said 5G phones would continue to get cheaper in 2021, which could lead to sales rising overall.
Anshul Gupta, a research director at Gartner, said: “In 2021, the availability of lower end 5G smartphones and innovative features will be deciding factors for end users to upgrade their existing smartphones. The rising demand for affordable 5G smartphones outside China will boost smartphone sales in 2021.”
China pulls further ahead with digital currency
China has enlisted the Ant-backed company MYbank to join the country's expanding digital yuan trial.
MYbank's service will be introduced to the digital yuan app which is run by the People's Bank of China, according to a company spokesperson.
The participation of MYbank alongside Tencent-backed WeBank is likely to expand the digital yuan's reach as China pushes for the central bank digital currency (CBDC) to become a world first. Six state owned lenders are also taking part in the trial.
In November, a governor for the People's Bank of China said more than 2 billion yuan ( £220 million) had been spent in the digital currency so far.
Read more on China's efforts to introduce a digital currency here.
Treasury urged to 'sort out' Britain's digital tax
It may now be almost a year since the UK's digital services tax came into force but critics are concerned it is still not managing to level the playing field between Big Tech and smaller competitors.
Over the weekend, Dame Margaret Hodge, the Labour MP and tax campaigner, urged the Treasury to “step up and sort out” tax, to close a loophole that allows tech giants including Amazon to pass on the fee to small businesses.
As Matthew Field reports, Dame Margaret said Amazon had been a big winner from the coronavirus pandemic but was not paying the tax directly due to how the rules were written.
“Our high streets and smaller businesses are desperately struggling. That’s why it’s so galling that Amazon doesn’t pay its fair share and avoids the new digital services tax."
Amazon said it had "encouraged the Government to pursue a global agreement on the taxation of the digital economy at OECD level rather than unilateral taxes, so that rules would be consistent across countries and clearer and fairer for businesses".
Australia 'won't back down on news law' despite Facebook pressure
Australia will not be backing down on planned laws which will make Google and Facebook pay for news, one of the country's senior politicians has said.
Simon Birmingham, Australia’s Minister for Finance, said on Monday that the “bill as it stands ... meets the right balance".
The upcoming government media code demands that Facebook and Google agree direct fees with news producers, or instead accept a price decided from an official arbitrator.
It has sparked a fierce response from Big Tech firms, with Facebook last week blocking all news content, arguing that it was "forced to take the steps that we did because [the proposed media law] penalises Facebook for content that it didn’t take or didn’t ask for".
"We think it’s an unworkable precedent," Facebook’s European head Nicola Mendelsohn told LBC.
Over the weekend, the Telegraph reported that Oliver Dowden was attempting to speak to Facebook about the Australian move, having been alarmed at the move by the company to block news in the country.
Competition watchdog 'plotting further Big Tech probes'
The head of the UK's Competition & Markets Authority, Andrea Coscelli, has signalled plans to kick off a string of competition probes into Big Tech firms.
Speaking to the Financial Times, Coscelli said the watchdog was "actively scanning the players, the complaints we have received, the cases that others are doing, what could be done in parallel with others, where are the gaps in the work the European Commission is doing".
He said it was expecting to open more investigations over the next year.
It comes ahead of the establishment of a "digital markets unit" within the CMA in April, which is expected to be handed sweeping new powers to clamp down on Big Tech dominance.
The CMA has already investigated a number of deals in the tech sector, notably holding up an investment by Amazon into Deliveroo for almost a year amid concerns the deal would see the US tech firm gain steer over the British takeaway app.
TransferWise rebrands ahead of IPO
TransferWise has changed its name to "Wise" to reflect its expansion beyond money transfers, as speculation mounts that it is gearing up for a blockbuster public float.
The company said the switch to the Wise brand would complete in March. The fintech company processes around £4.5bn in cross-border transactions each month, but has also launched other products including one which resembles a multi-currency bank account.
Kristo Käärmann, CEO and co-founder of the company, said: “Today our name catches up with who we’re already building for - a community of people and businesses with multi-currency lives. That community now even includes the banks themselves."
Late last month, reports emerged that Wise had appointed bankers for a float which would be expected to take place later this year. Analysts said the company was likely to achieve a valuation ahead of the $5bn it was valued at when it sold a stake last year.
Bitcoin hits fresh peak
The price of Bitcoin surpassed $58,000 over the weekend, a new record high which came just days after its market capitalisation surpassed $1 trillion.
The cryptocurrency, which has backers including Tesla chief Elon Musk, has almost tripled in value over the past three months.
Its rally has been driven by growing acceptance among institutional investors. Earlier this month, America's oldest bank, BNY Mellon, said it would start transacting Bitcoin for clients.
Musk has branded Bitcoin "less dumb" than cash, although over the weekend said its price did "seem high". His electric car company Tesla last month made a $1.5bn investment into Bitcoin, with analysts estimating that since then, the company has made a $1bn profit on that investment.
Dan Ives, Wedbush analyst, said the company was "on a trajectory to make more from its Bitcoin investments than profits from selling its EV (electric vehicle) cars in all of 2020".
Five things to start your day
1) Apple blocks advertisers from tracking children's data Apple is now shielding millions of children from handing over their data to advertisers
2) Mark Carney jumps aboard payments processor Stripe The fintech firm is negotiating a new funding round that could bring its valuation to more than $100bn
3) Treasury urged to tighten up Digital Services Tax on Amazon Dame Margaret Hodge urged the Treasury to tighten up the tax ahead of the budget
4) New York Stock Exchange joins Robinhood supplier Citadel to oppose algorithmic practice The NYSE wants to overturn the SEC's approval of a new trading method
5) Fintech review to push for pensions funds to back start-ups The upcoming review of the UK's fintech sector will call for a new growth fund to support booming businesses
Coming up today
Spotify will hold a livestreamed event titled "Stream On" from 4pm onwards where it's expected to make a series of announcements.