In the context of a crypto market on the verge of a historic milestone, the chairman of the U.S. Federal Reserve, Jerome Powell, offered his perspective on Bitcoin, comparing it to gold during the DealBook Summit of The New York Times. According to Powell, Bitcoin functions more as a speculative asset than as a means of payment. 'It's like gold, only virtual and digital,' he commented.
Bitcoin: a competitor to gold, not to the dollar
Powell emphasized that Bitcoin does not compete with the dollar as a common medium of exchange due to its high volatility and lack of widespread adoption as a payment method. Instead, he sees it as a digital alternative to gold, attracting those seeking a speculative refuge for their value.
These statements resonate with previous comments from Powell in June 2023, when he stated that Bitcoin has 'staying power.' Currently, the cryptocurrency is priced close to $97,400, after a significant rally following the presidential election in November in the U.S., where elected President Donald Trump promised a pro-crypto approach.
The political and regulatory impact on the crypto market
The recent rise of Bitcoin has been partly driven by Trump's declared support for the cryptocurrency industry. In July, Trump positioned himself as 'the pro-Bitcoin candidate that America needs.' Additionally, his decision to appoint Paul Atkins, known for his friendly stance towards cryptocurrencies, as chairman of the SEC reinforces this narrative.
Powell also addressed the role of the banking system in relation to the crypto sector, highlighting the importance of ensuring that interactions between both do not compromise the health of the financial system. However, he clarified that the Fed does not directly regulate cryptocurrencies, focusing on protecting the stability of financial institutions.
