Powell’s Comments at the DealBook Summit
On December 4th, United States Federal Reserve Chair Jerome Powell reiterated his view that Bitcoin is a direct competitor to gold and not a threat to the US dollar. In an interview with The New York Times-hosted DealBook Summit in New York, Powell made it clear that people use Bitcoin as a speculative asset rather than a form of payment or store of value.
Bitcoin as a Speculative Asset
"People use Bitcoin as a speculative asset," Powell said during the summit. "It’s just like gold, only it’s virtual, it’s digital." This comment highlights the volatility associated with cryptocurrencies like Bitcoin and suggests that they are not a reliable store of value. The Federal Reserve Chair has made these comments before, comparing Bitcoin to gold during an event hosted by the Bank for International Settlements in March 2021.
The Rise of Bitcoin
Since Powell’s previous comments, Bitcoin has seen significant growth, soaring 70% compared to a 52% increase in gold over the same period. This rise can be attributed to various factors, including increased adoption and growing interest from institutional investors.
Bitcoin vs. Gold
Powell’s statement that Bitcoin is not a competitor for the US dollar but rather a competitor for gold has been met with mixed reactions. Some argue that the Federal Reserve Chair’s comments are an attempt to downplay the significance of Bitcoin as a potential threat to the US dollar. However, it’s essential to note that Powell’s comments were made in the context of comparing Bitcoin to gold, which is often seen as a hedge against inflation and market volatility.
Consumer Protection
During the summit, Powell also emphasized the importance of consumer protection when dealing with cryptocurrency companies doing business with banks. The Federal Reserve Chair noted that while they do not directly regulate this area, ensuring the health and well-being of these institutions is crucial for maintaining financial stability.
The Future of Cryptocurrency Regulation
Powell’s comments come at a time when the US government is undergoing changes, with President-elect Donald Trump selecting crypto advocates to lead key departments. Scott Bessent, a hedge fund manager, has been chosen to lead the Secretary of Treasury department, while Howard Lutnik, CEO of Cantor Fitzgerald, will head the Commerce department.
Trump’s Impact on Cryptocurrency
Donald Trump’s presidential election win in November has resulted in an overhaul of the US cabinet. The President-elect has reportedly been critical of Powell’s decision-making, but the Federal Reserve Chair has asserted that he won’t resign if Trump tries to push him out. Meanwhile, Trump selected crypto advocate Paul Atkins to become the new chair of the Securities and Exchange Commission after Gary Gensler announced his resignation when Trump is inaugurated on January 20.
The Rise of Ethereum and Solana
As Bitcoin continues to rally towards its all-time high, other cryptocurrencies like Ethereum and Solana are gaining attention. The price of Ethereum has surged in recent months, pushing it closer to surpassing the $100,000 milestone. Meanwhile, Solana has seen significant growth, with its price increasing by over 70% in the past month.
Conclusion
Jerome Powell’s comments at the DealBook Summit reiterate his view that Bitcoin is a direct competitor to gold and not a threat to the US dollar. The rise of Bitcoin and other cryptocurrencies like Ethereum and Solana highlights the growing interest and adoption of digital assets. As the US government undergoes changes, it will be essential to monitor the impact on cryptocurrency regulation and its potential effects on the market.
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- Comeback 2025: Is Ethereum Poised to Catch Up with Bitcoin and Solana?
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