In summary
- Jerome Powell compared Bitcoin to gold, not as a store of value, but as a digital speculative asset.
- BTC rose more than 2% following the comments, reaching a capitalization of almost $1.95 trillion.
- Powell reiterated that he is not allowed to own cryptocurrencies, highlighting the Fed’s independence.
At an event on Wednesday, Federal Reserve Chairman Jerome Powell called Bitcoin a rival not to the US dollar, but to gold, although not in the sense that BTC is also a store of value.
“Bitcoin is not a competitor to the dollar, it really is a competitor to gold,” Powell said in an interview with journalist Andrew Ross Sorkin at the New York Times DealBook Summit in New York.
When asked about Bitcoin and how it might reflect people’s faith or lack thereof in the US dollar or the Federal Reserve itself, Powell commented: “I don’t think people see it that way.” He went on to say that Bitcoin is used as a speculative asset and that he believes it is too volatile to be a store of value, adding: “It’s like gold, only it’s virtual, it’s digital.”
Powell’s comments quickly circulated in the crypto community on X (formerly known as Twitter), leading to direct comparisons of the market capitalizations of gold and Bitcoin.
Bitcoin rose more than 2% in the hours following Powell’s talk, surpassing $99,000, according to data from CoinGecko.
Thanks to its price surge over the past month, Bitcoin has reached a market capitalization of nearly $1.95 trillion, placing it at #7 in total global asset capitalization, according to CompaniesMarketCap.com. The top crypto asset trails only gold and five publicly traded US companies, including Nvidia, Google parent Alphabet and Facebook parent Meta.
Powell has previously spoken about Bitcoin and cryptocurrencies in public, indicating in 2021 that the Fed would not ban Bitcoin, and later suggesting that BTC and cryptocurrencies had “permanence” as an asset class in 2023.
When asked on Wednesday if he would ever own Cryptocurrency, Powell responded: “I’m not allowed to.”
In his interview with Sorkin, Powell also talked about the independence of the Federal Reserve, Fed transparency, inflation, geopolitical risk and more.
The New York Times DealBook Summit is a one-day program featuring live interviews with cultural, business and political leaders. Other interviews on the agenda included OpenAI CEO Sam Altman, Amazon founder Jeff Bezos, and former President Bill Clinton.
Edited by Andrew Hayward
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