- Fed Chair Jerome Powell has reiterated a 2021 statement that Bitcoin directly competes with gold, but not the US Dollar (USD).
- Powell also disclosed that he has no issue with crypto companies that engage in business collaborations with banks.
United States Federal Reserve Chair Jerome Powell has publicly confirmed his strong interest in Bitcoin (BTC) as he defends the asset against the widely speculated claims that it directly competes with the US Dollar (USD).
Speaking at the New York Times-hosted DealBook Summit on December 4, Powell clarified that Bitcoin is just like gold. His reason is that the asset is not used for payment or as a store of value since it is highly volatile.
People use Bitcoin as a speculative asset. It’s just like gold, only it’s virtual, it’s digital…People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar. It’s really a competitor for gold.
Powell’s 2021 Remark on Bitcoin
Researching his previous remarks, we discovered that Powell made a similar statement in 2021 when he was speaking at an event hosted by the Bank for International Settlements. At that time, he highlighted that Bitcoin is backed by nothing, and it could be a substitute for gold. Meanwhile, Bitcoin was trading at $58,200 at the time. Since then, the asset has risen by more than 70% while gold has managed a 52% surge.
At the DealBook Summit, Powell disagreed with the speculations that people view Bitcoin as an object of lack of trust in the Federal Reserve and the USD. Answering a question of whether he owns Bitcoin or not, Powell disclosed that he is not allowed to have that. However, he clarified that he has no problem with crypto companies collaborating with banks for businesses once it does not affect their health and well-being.
Currently, Bitcoin has become one of the most interesting topics under the new administration as pro-crypto candidate Paul Atkins has been announced as Gary Gensler’s replacement to lead the US Securities and Exchange Commission (SEC). Hedge Fund manager Scott Bessent has also been chosen as the head of the Secretary of Treasury, while Cantor Fitzgerald CEO Howard Lutnik has been appointed to lead the Commerce departments.
Trump’s Relationship with Powell
Powell was nominated by the then president Donald Trump for the Fed chair in 2017. In 2021, Joe Biden reappointed him. Earlier this year, Trump accused Powell of trying to lower interest rates to help the Democrats score “political points.”
It looks to me like he’s trying to lower interest rates for the sake of maybe getting people elected, I don’t know,” Trump said in an interview with Fox Business Network’s Maria Bartiromo that aired Friday morning. I think he’s going to do something to probably help the Democrats, I think if he lowers interest rates.
Meanwhile, Powell stated that he would not resign even if Trump tried to push him out.
At press time, Bitcoin was trading at $102.3k after surging by 6% in the last 24 hours.
As we just reported, the Global Head of Digital Assets Research at Standard Chartered, Geoff Kendrick, believes that Bitcoin could hit $125k before the end of 2024. He also expects the asset to hit $200k by the end of 2025.
