• Fed Chair Jerome Powell compared bitcoin to digital gold, stating it is not used for payments and is highly volatile
• Powell said bitcoin is a speculative asset and a competitor to gold rather than the U.S. dollar
• Powell indicated the Fed wants to ensure crypto businesses do not threaten the well-being of banks, but does not directly regulate crypto
In an interesting turn of events, U.S. Federal Reserve Chair Jerome Powell has likened the high-flying cryptocurrency, Bitcoin, to digital gold. This comparison comes as Bitcoin’s value inches closer to the $100,000 mark.
Title: Powell’s View on Bitcoin
Jerome Powell, Chair of the U.S. Federal Reserve, offered his perspective on Bitcoin during a recent appearance at The New York Times DealBook Summit. He stated that Bitcoin isn’t typically used as a form of payment due to its extreme volatility. Instead, Powell sees Bitcoin as a speculative asset, akin to gold. The main difference he pointed out is that Bitcoin is virtual and digital. He further clarified that he doesn’t see Bitcoin as a competitor to the dollar, but rather, a competitor to gold.
Powell’s Previous Stance on Bitcoin
Powell’s stance on Bitcoin has shown an interesting evolution. In June 2023, he reportedly expressed the belief that Bitcoin has staying power. This viewpoint appears to be congruent with the current performance of Bitcoin, which is trading around $100,000 following the U.S. presidential election in early November.
Impact of the Presidential Election on Bitcoin
President-elect Donald Trump, known for his openness towards the crypto industry, declared in July that he would be the pro-bitcoin candidate America needs. Earlier on the same day as Powell’s remarks, Trump appointed former regulator Paul Atkins to chair the U.S. Securities and Exchange Commission. Atkins, perceived as crypto-friendly, served on The Digital Chamber’s board of advisers in 2020.
Powell’s Personal Take on Crypto Ownership
While Powell has shown a nuanced understanding of cryptocurrency, he was clear about his personal involvement – or lack thereof – with the asset. When asked if he would ever own crypto, Powell stated that he’s not allowed to.
The Central Bank’s Interaction with the Crypto Business
In response to a question about the relationship between the central bank and the crypto business, Powell stressed that the bank would want this interaction to not jeopardize the health and well-being of the banks. He also noted that the Federal Reserve does not regulate crypto directly.
Conclusion Paragraph
Thus, Powell’s comparison of Bitcoin to digital gold represents an intriguing perspective from a key figure in U.S. financial policy. As Bitcoin’s value continues to surge, the world will undoubtedly be watching closely to see how this digital gold rush unfolds.
