Federal Reserve Chair Jerome Powell described Bitcoin as a speculative asset comparable to gold during his appearance at The New York Times DealBook Summit on Wednesday. While acknowledging Bitcoin’s rising prominence, Powell emphasized its volatility and limited use as a payment method.
“People use Bitcoin as a speculative asset, right? It’s like gold,” Powell stated. “It’s just like gold, only it’s virtual, it’s digital. It’s not a competitor for the dollar—it’s really a competitor for gold.”
Bitcoin’s Current Standing and Powell’s Previous Remarks
Powell’s comments come as Bitcoin approaches $100,000 in value, fueled by growing interest in digital assets. This milestone follows President-elect Donald Trump’s pro-crypto stance and his appointment of former regulator Paul Atkins—considered crypto-friendly—to chair the U.S. Securities and Exchange Commission.
In June 2023, Powell told lawmakers that Bitcoin has “staying power,” indicating a recognition of its resilience in the financial landscape. Despite this acknowledgment, Powell remains cautious about its broader role, reiterating the Federal Reserve’s limited direct regulation of cryptocurrencies.
Bitcoin’s Position in the Market
Currently trading around $97,400, Bitcoin’s value has surged following the U.S. presidential election. Analysts attribute this growth in part to Trump’s openness toward cryptocurrency. In July, Trump called himself the “pro-Bitcoin candidate that America needs.”
Despite its rise, Powell highlighted Bitcoin’s inherent volatility and speculative nature, distancing it from traditional fiat currencies like the U.S. dollar.
Powell on Crypto Regulation and Personal Ownership
During the summit, Powell also discussed the Federal Reserve’s approach to cryptocurrencies, noting the importance of ensuring that crypto’s interaction with banks does not compromise financial stability.
When asked if he personally owns cryptocurrency, Powell replied, “I’m not allowed to.”
Political Dynamics and the Fed’s Independence
The relationship between Trump and Powell has been contentious, particularly regarding the Federal Reserve’s handling of inflation. Powell reaffirmed the Fed’s independence, stating last month that he would not resign if asked to by Trump, as such a request would be legally impermissible.
Bitcoin’s Role in a Shifting Financial Landscape
As Bitcoin continues to challenge traditional financial norms, Powell’s remarks underscore its evolving perception—from a fringe innovation to a speculative asset with staying power. While critics point to its volatility, its growing role in the global economy signals a broader acceptance of digital assets.
Featured image from: yahoo.com