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Against the backdrop of a crypto market on the brink of a historic milestone, US Federal Reserve Chairman Jerome Powell offered his perspective on Bitcoin, comparing it to gold during The New York Times’ DealBook Summit. 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 the dollar
Powell stressed that Bitcoin does not compete with the dollar as a commonly used currency due to its high volatility and lack of mass adoption as a payment method. Instead, it sees it as a digital alternative to gold, attracting those seeking a speculative haven for its value.
These statements resonate with Powell’s previous comments in June 2023, when he stated that Bitcoin has “staying power.” Currently, the Cryptocurrency is at a price close to $97,400, after a significant rally following the November US presidential election, where President-elect Donald Trump promised a pro-crypto approach.
The political and regulatory impact on the crypto market
Bitcoin’s recent rise has been fueled in part by Trump’s stated support for the cryptocurrency industry. In July, Trump positioned himself as “the pro-Bitcoin candidate America needs.” Furthermore, 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 interactions between the two not compromising 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.
Future prospects
Although Powell emphasized that Federal Reserve employees are not allowed to own cryptocurrencies, his comments reflect a growing recognition of Bitcoin as an asset class that, while not replacing the dollar, continues to gain traction as a “digital gold.”
Meanwhile, the crypto community is closely watching how the Trump administration’s policies and regulatory decisions will impact the crypto ecosystem, at a time when Bitcoin continues to demonstrate its ability to consolidate in the global financial market.
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