Originally published on: December 05, 2024
During The New York Times-hosted DealBook Summit in New York, Federal Reserve Chair Jerome Powell reiterated his stance that Bitcoin poses competition to gold, rather than the US dollar. Powell emphasized that people view Bitcoin as a speculative asset, much like gold, but in a virtual and digital form.
Powell had previously compared Bitcoin to gold during an event hosted by the Bank for International Settlements in March 2021, when Bitcoin was trading at $58,200. Highlighting the speculative nature of cryptocurrencies like Bitcoin, Powell remarked that they are not backed by anything.
Despite Powell’s remarks, Bitcoin has seen a 70% surge since then, outperforming gold, which increased by just 52%. Powell dismissed the notion that Bitcoin represents a lack of faith in the Federal Reserve and the US dollar, stating that people do not view it that way.
When asked if he owned Bitcoin, Powell responded that he was not allowed to. However, he expressed openness to crypto companies conducting business with banks, as long as they do not pose a threat to their stability.
While emphasizing consumer protection, Powell noted that the Federal Reserve does not directly regulate cryptocurrencies. The surge in Bitcoin price, nearing $100,000, has been attributed in part to Donald Trump’s presidential election win.
With Trump appointing pro-crypto individuals to key positions, such as hedge fund manager Scott Bessent and Cantor Fitzgerald CEO Howard Lutnik, the crypto-friendly trend in the US government seems to be growing. Despite reported criticism from Trump, Powell asserted that he would not resign if pressured to do so.
Furthermore, Trump’s selection of crypto advocate Paul Atkins as the new chair of the Securities and Exchange Commission indicates a positive outlook for cryptocurrencies in the upcoming administration.
In conclusion, Bitcoin’s competition with gold, rather than the US dollar, remains a key point of discussion in the financial market, with prominent figures like Powell shedding light on the evolving landscape of digital assets.
