On December 20, cryptocurrencies collectively plummeted.

Bitcoin fell below $95,000, reporting $94,541 as of the time of publication, down over 7% in 24 hours; Ethereum reported $3,243, down over 11%.


On December 19, Federal Reserve Chairman Jerome Powell stated at a press conference after the December interest rate meeting that the Fed does not intend to include Bitcoin on its balance sheet. 'We are not allowed to hold Bitcoin,' Powell said. The Federal Reserve Act stipulates what the Fed is allowed to own, and the Fed is not seeking to change that; this is a matter for Congress to consider, but the Fed does not wish to modify the law.

According to a previous report by Xinhua News Agency, Federal Reserve Chairman Jerome Powell said on December 18 that the Fed has no intention of participating in any government-led 'Bitcoin hoarding' plan, as the Fed, as the central bank of the United States, 'has no authority to hold Bitcoin.'

Powell's remarks were in response to President-elect Donald Trump's idea of promoting the federal government to establish a 'Bitcoin strategic reserve' after taking office. Trump did not provide details, only stating that the initial reserves could include Bitcoin confiscated from criminals, of which there are reportedly about 200,000, with a total market value of about $21 billion at current prices.

According to Reuters, due to Trump's public support for developing the cryptocurrency industry, the prospect of his re-election has greatly excited the 'crypto community,' leading to a rise in the prices of cryptocurrencies like Bitcoin in the U.S. market.

Trump plans to create a position of Director of Artificial Intelligence and Cryptocurrency Affairs at the White House after taking office, nominating former PayPal executive David Sacks for the position. He also nominated Paul Atkins to serve as chairman of the Securities and Exchange Commission. Both of these individuals are strong supporters of developing cryptocurrencies.

However, some analysts point out that due to the frequent and severe fluctuations in Bitcoin's value over its 15-year development history, it is not very reliable as a means of storing value or as a medium of exchange, which are key functions of a national reserve currency.

Some within the Republican Party have responded to Trump's proposal. Federal Senator Cynthia Lummis drafted a proposal to establish a Bitcoin reserve, intending for the U.S. Treasury to purchase 200,000 Bitcoins annually, with a goal of accumulating 1 million coins, funded by deposits from various Federal Reserve banks and gold reserves.

According to a report released by Barclays Bank this week, establishing such a Bitcoin reserve would require Congressional approval as well as the Treasury issuing new bonds. Some analysts estimate that the related proposal 'will face strong resistance from the Federal Reserve.'

Powell stated that the legal issues concerning the establishment of a Bitcoin strategic reserve 'are matters that Congress should consider, but the Fed does not intend to seek a revision of the law.'

Federal Reserve officials generally remain skeptical about digital assets like cryptocurrencies, and the previous plan to create a 'digital dollar' has already been shelved. Powell stated on the 4th of this month: 'The Fed is responsible for regulating and supervising banks, and we hope the interaction between the cryptocurrency industry and banks... will not threaten the health of the banking system.'



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