Federal Reserve Chair Jerome Powell recently discussed Bitcoin at the New York Times DealBook Summit, stating that he views it as a competitor to gold rather than the US dollar. He pointed out that while people invest in Bitcoin as a speculative asset, they don’t use it much for transactions or as a stable store of value due to its volatility. Powell also mentioned that the economy is doing well but acknowledged higher-than-expected inflation. Concerning interest rates, he indicated a cautious approach to cuts, with the Market anticipating a potential 25 basis point reduction in December, bringing the rate range down to between 4.25% and 4.5%.
Federal Reserve Chair Jerome Powell recently spoke at the New York Times DealBook Summit, where he addressed the role of Bitcoin in the financial landscape. He described Bitcoin not as a competitor to the US dollar but rather as a competitor to gold. According to Powell, many people use Bitcoin as a speculative asset, saying, “It’s highly volatile” and “not a form of payment or a store of value.”
Powell also highlighted that the Federal Reserve’s main function is to observe how digital assets like Bitcoin interact with the banking system, emphasizing that the central bank does not regulate these assets. He confirmed that he does not own any cryptocurrencies due to his position.
In terms of the economy, Powell expressed optimism, stating that it is currently in “great shape.” However, he noted that growth has surpassed expectations and inflation is slightly above desirable levels. Regarding interest rates, Powell indicated a cautious approach to potential cuts, suggesting the Fed might drop rates at its December meeting, where a 75% chance for a 25 basis point reduction is predicted.
These remarks arrive just before the Federal Open Market Committee makes its highly anticipated rate decision, making Powell’s insights particularly significant for Market watchers and investors.
The discussion around Bitcoin’s role and the Fed’s monetary policy continues to gain momentum as both the cryptocurrency and traditional finance landscapes evolve.
What did Fed Chair Powell say about Bitcoin?
Fed Chair Powell said that Bitcoin is more like a competitor to gold rather than the US dollar.
Why does Powell compare Bitcoin to gold?
Powell believes that Bitcoin acts as a store of value, similar to gold, which people invest in to protect their wealth.
Can Bitcoin replace the US dollar?
Powell thinks Bitcoin is not a competitor to the US dollar, meaning it is not likely to replace it as the main currency for everyday transactions.
What does it mean for Bitcoin to be a competitor to gold?
It means that some people may choose to invest in Bitcoin instead of gold to keep their money safe from inflation or economic instability.
Is this view common among financial experts?
Many financial experts have similar views, seeing Bitcoin more as a digital asset or commodity rather than a true currency like the US dollar.
