According to the Zhitong Finance APP, San Francisco Fed President Daly stated that cryptocurrencies should be viewed as an independent asset class, rather than being conflated with gold as often seen.
Daly said, "It can be a currency. It may be a medium of exchange... It can be a stock—a store of value or sometimes a depreciating asset. We just need to define these terms."
"So I don't think it's gold," Daly added. "It has some attributes like gold at times, but I don't see it that way."
Daly's assessment differs slightly from that of Federal Reserve Chairman Powell, whose comments on Bitcoin earlier this month energized the cryptocurrency community.
Powell said, "People view Bitcoin as a speculative asset. It's like gold, only it's virtual, it's digital. People don't see it as a means of payment or a store of value. It is very volatile. It is not a competitor to the dollar; it is a true competitor to gold."
Daly agrees with Powell that cryptocurrencies are not yet ready to become currencies, which makes sense at this point in their lifecycle, as some cryptocurrency bulls say.
Daly explained, "The property it needs is that it must grow with the economy. So its value does not change because people want it. So when more people want a dollar bill, the dollar bill does not appreciate. What causes the dollar to fluctuate is the economy and our growth rate relative to other countries. Therefore, to become a currency, it must perfect this attribute."
Although cryptocurrency seems to have a long way to go before being approved by Congress as currency, this has not stopped the bullish momentum of various digital assets.
The most popular cryptocurrency, Bitcoin, has continued to perform well since Trump was elected on November 5, and it first broke the $100,000 mark on December 4. Since election day, the price of Bitcoin has increased by 38%, and it has risen by 106% this year.
So far this year, cryptocurrency-related stocks like Coinbase (COIN.US) and Robinhood (HOOD.US) have soared 45% and 204%, respectively.
The resurgence of interest in the cryptocurrency market is also reflected in recent investments by some entities, which usually prefer traditional stock and bond options. In May of this year, a pension fund in Wisconsin purchased $160 million in shares of two new funds approved by regulators earlier this year, thereby adding Bitcoin to its holdings.
MicroStrategy (MSTR.US) has also continued to purchase Bitcoin in large quantities in recent weeks.
The new government has appointed venture capitalist David Sacks as the cryptocurrency czar, responsible for overseeing issues and initiatives related to cryptocurrencies. One of these initiatives may be to create a Bitcoin reserve, as suggested by Trump supporters.
Benchmark Company analyst Mark Palmer stated, "In fact, the focus on making the United States a leader in cryptocurrency, Bitcoin mining, and other areas mentioned by President Trump is a huge shift in itself. We assume in our analysis that by the end of 2026, the price of Bitcoin will reach $225,000."
Palmer added, "We are seeing more and more institutions starting to adopt Bitcoin, which is key."