Bitcoin Seen as Competitor to Gold, Not US Dollar, According to Jerome Powell
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Federal Reserve Chair Jerome Powell has reiterated that Bitcoin is more akin to gold than a direct competitor to the US dollar during the recent DealBook Summit. Powell emphasized that Bitcoin is perceived primarily as a speculative asset and not widely recognized for transactional purposes or as a secure store of value. Notably, he stated, “People are not using it as a form of payment or as a store of value. It’s highly volatile,” underscoring Bitcoin’s speculative nature. Powell likens Bitcoin to gold, downplaying its threat to the dollar and highlighting its speculative appeal as Bitcoin nears its all-time high. Powell’s Perspective: Bitcoin as a Speculative Asset During his conversation at the DealBook Summit, Jerome Powell clarified that Bitcoin is not a direct challenge to the US dollar; instead, he views it as a competitor to gold. He articulated that its volatility and lack of backing render it unsuitable as a reliable form of payment or store of value. This assertion aligns with his previous statements from March 2021, affirming that Bitcoin is primarily a speculative asset, reflecting the unpredictable trading behaviors often seen in cryptocurrency markets. Context of Bitcoin’s Rise: Economic and Political Factors The current surge in Bitcoin’s price, which recently approached $99,329, has drawn considerable attention partly due to political shifts following Donald Trump’s election victory. The incoming administration’s potential to create a more crypto-friendly environment could further fuel interest and investment in Bitcoin. This reality is compounded by the appointments of notable figures in the finance and tech sectors who are advocates for cryptocurrency, signifying a positive future outlook for digital assets. Implications of Powell’s Remarks on Regulation and Consumer Protection In addition to discussing Bitcoin’s market role, Powell addressed the regulatory landscape surrounding cryptocurrencies. He indicated openness to collaboration between crypto firms and traditional banks,…
Filed under: News - @ December 5, 2024 1:24 am