In the context of President Trump's proposal to establish a 'national strategic Bitcoin reserve,' Federal Reserve Chairman Powell reiterated the Fed's position that it cannot hold Bitcoin in his latest public speech. This statement has attracted widespread attention from the market, impacting Bitcoin's price and prompting many to ponder the future of cryptocurrencies in the U.S.
After the Federal Reserve announced a 25 basis point cut in the benchmark interest rate and lowered its expectations for rate cuts next year, Powell clearly stated that under current law, the Federal Reserve is not permitted to hold Bitcoin or participate in the establishment of a Bitcoin reserve. This issue should be discussed and decided by Congress, and the Federal Reserve currently has no interest in this matter and does not intend to seek to change this situation. This means that even if there are legislative proposals to change the functions and legal framework of the Federal Reserve, it is not an easy task.
After this news was released, the market reacted quickly, and Bitcoin's price plummeted rapidly, even briefly falling below the $100,000 mark. This price fluctuation not only reflects investors' sensitivity to Federal Reserve policies but also shows market concerns about the potential for future Bitcoin reserves.
Some investors expressed disappointment, believing that government intervention could be a key factor in the future development of Bitcoin, and a lack of regulatory support would make it difficult for Bitcoin to enhance its status in the mainstream financial system.
But some investors remain optimistic about the future of Bitcoin, believing that a 20% pullback in a bull market should be accepted and adapted to. This is just a 'buyable pullback,' not the end of the bull market. The overall trend of the market is still upward, and the current adjustment may just be a short-term fluctuation, with the possibility of higher price levels in the future.
It is worth mentioning that this is not the first time Powell has made these statements; he has reiterated the same comments after several FOMC meetings. However, this is the first time since Donald Trump was elected as the 47th president that Powell has made the above comments. Therefore, some analysts believe Powell's statement is not only a clear expression of Federal Reserve policy but also a direct response to Trump's proposed 'national strategic Bitcoin reserve' plan during his campaign.
Trump proposed the idea of establishing a 'national strategic reserve for Bitcoin' during his campaign, even claiming that Bitcoin seized by law enforcement could be used as a reserve basis. This proposal has received support from some lawmakers, including Senator Cynthia Lummis. Lummis introduced a bill suggesting that the U.S. Treasury should purchase 200,000 Bitcoins annually until the total reserve reaches 1 million.
However, these ideas appear even more elusive after Powell's statement. According to the Federal Reserve Act, the functions of the Federal Reserve are strictly limited, meaning that any proposal regarding Bitcoin reserves would need to be reviewed and approved by Congress. Powell's remarks indicate that the Federal Reserve does not intend to seek legal changes, which also suggests that Trump's Bitcoin reserve plan may face significant obstacles.
Moreover, the Federal Reserve's top priority is to control inflation and maintain economic stability, rather than engage in the management of cryptocurrencies. This stance makes the future of Bitcoin more uncertain, especially in the current economic environment where investors show great sensitivity to changes in the Federal Reserve's policies.
Powell's comments highlight the complexity and uncertainty of U.S. cryptocurrency policy. Despite the growing market demand for cryptocurrencies, the U.S. regulatory framework has not fully adapted to this change. Many economists and investors are beginning to pay attention to potential policy changes under Trump, believing that his campaign promises to protect cryptocurrency mining and promote Bitcoin reserves may influence future policy directions.
In summary, although Powell's current stance seems to be 'slapping down' Trump's Bitcoin reserve plan, future changes are always unpredictable. With the continuous development of cryptocurrencies, new legal frameworks may emerge that allow the Federal Reserve to participate in Bitcoin management to some extent.
However, such changes require time and consensus from all parties. In the future, U.S. regulatory policies will continue to influence the future of Bitcoin and cryptocurrencies, and real decision-making power remains in the contest between the government and the market.