US Treasury Secretary Issues Warning On Bitcoin Over Extreme Price Movements

MINNEAPOLIS (WCCO) -- Bitcoin hit a record high Friday, and the cryptocurrency's value has risen more than 80% just this year.

In the West Seventh neighborhood of St. Paul is a somewhat cryptic billboard that says, "A Peaceful Revolution," and a $1 bill that says "A Decentralized Network."

The only identifying feature is a Twitter account that says its goal is to raise Bitcoin awareness.

At Bobby and Steve's Auto World in downtown Minneapolis, where there's a Bitcoin ATM, they'll tell you awareness is already pretty high. Dawn Villiard works there as an office leader.

"Since we put the machine in about a year and a half ago, it's been very popular," Villiard said. "We have some regular customers that come in here and invest."

But what exactly are they investing in? Bitcoin is a digital form of money. Professor Vivian Fang with the University of Minnesota's Carlson School of Management says cryptocurrencies are built on a digital infrastructure called a blockchain.

"[Advocates] want a completely decentralized system to achieve absolute freedom, right, from central clearing financial institutions [like banks] or a government," Fang said.

READ MORE: Good Question: How Does Bitcoin Work?

Bitcoin can be spent like regular money in a handful of ways, but many people approach it as an investment. Adam Suhr owns Dogecoin, another cryptocurrency, and says he's hoping to become a millionaire and retire off it.

"It's a little more stable than the lottery," Suhr said. "Worst-case scenario, if it drops to half the value I invested in, I can pull it back out."

There are dozens of Bitcoin ATMs around the Twin Cities metro. Customers insert money to purchase the cryptocurrency. The value of Bitcoin has more than doubled in the last three months.

Like any investment, the dizzying highs come with risk. United States Treasury Secretary Janet Yellen warned Monday about Bitcoin's extreme price movements, calling it an "extremely inefficient way" to invest.

"For anybody who is thinking to invest in Bitcoin, he or she would have to be able to swallow that volatility, so I guess my advice would be don't put all of your eggs in one basket," Fang said.

Bitcoin has become more mainstream recently, as shown by some of its investors. Tesla bought more than $1 billion worth, and CEO Elon Musk says the electric car company will begin accepting Bitcoin as payment.