December 20th, cryptocurrencies collectively plummeted.

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


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

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

Powell's remarks were a response to President-elect Donald Trump's idea of promoting a 'Bitcoin Strategic Reserve' for the federal government after taking office. Trump did not provide details but mentioned that the initial reserves could include Bitcoin confiscated from criminals, reported to be around 200,000 coins, worth approximately $21 billion at current market prices.

According to Reuters, Trump's public support for the development of the cryptocurrency industry has invigorated the 'crypto circle,' and the prospect of his return to power has significantly boosted the prices of cryptocurrencies like Bitcoin in the U.S. market.

Trump plans to establish a new position of Director of Artificial Intelligence and Cryptocurrency Affairs at the White House after taking office, nominating former PayPal executive David Sacks for the role. He also nominated Paul Atkins to be the Chairman of the Securities and Exchange Commission. Both are staunch supporters of cryptocurrency development.

However, some analysts point out that due to the frequent and severe fluctuations in Bitcoin's value over its 15-year history, it is not very reliable as a store of value or 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 has drafted a proposal to establish a Bitcoin reserve, intending for the U.S. Treasury to purchase 200,000 Bitcoins annually, aiming to accumulate 1 million coins, with funding coming from deposits at the Federal Reserve Banks and gold reserves.

According to a report released by Barclays Bank this week, establishing such a Bitcoin reserve would require not only Congressional approval but also the issuance of new bonds by the Treasury. Some analysts estimate that the relevant plan 'will face strong resistance from the Federal Reserve.'

Powell stated that the legal issues surrounding the establishment of a Bitcoin Strategic Reserve 'are matters for Congress to consider, but the Fed does not intend to seek a revision of the law.'

Federal Reserve officials generally remain skeptical about cryptocurrencies as a form of digital asset, and previous plans to create a 'digital dollar' have been shelved. Powell stated on the 4th of this month: 'The Fed is responsible for regulating and supervising banks, and hopes that the interaction between the cryptocurrency industry and banks... will not threaten the health of the banking system.'



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