Key Points
- Federal Reserve Chair Jerome Powell likens Bitcoin to gold, emphasizing its role as a speculative asset.
- Bitcoin’s market capitalization surpasses silver, reaching $1.92 trillion, but still lags behind gold’s $18 trillion.
Jerome Powell, Chair of the Federal Reserve, shared his perspective on Bitcoin’s evolving role in the financial landscape at the DealBook Summit on December 4th.
Powell’s View on Bitcoin
Powell compared Bitcoin more to gold than the U.S. dollar, highlighting its potential as a store of value rather than a traditional currency.
He stated that people use Bitcoin as a speculative asset, similar to gold, but in a virtual and digital form.
Powell also addressed concerns about Bitcoin’s potential threat to the U.S. dollar and the Federal Reserve’s authority. He clarified that despite its growing recognition, Bitcoin does not challenge the dollar’s strength as it remains highly volatile and is not widely used as a primary payment method or a stable store of value.
Powell emphasized that while Bitcoin’s role as a digital asset continues to evolve, its volatility limits its reliability in mainstream financial transactions.
Trump’s Pro-Crypto Plans
Powell’s remarks came at a time when the incoming Trump administration is expected to advocate for the legalization of digital assets. During his campaign, Trump accepted donations in Bitcoin, Ethereum, Dogecoin, and Solana, and pledged to establish a national Bitcoin reserve.
However, Powell reiterated that the Federal Reserve does not see it as its role to regulate the cryptocurrency sector.
Bitcoin witnessed an impressive rally following Trump’s election win last month, hitting record highs and briefly surpassing $98,000 before stabilizing. As of December 4th, Bitcoin was trading around $96,800. Recently, it surged past the $100K mark, reaching $102,436.85 after a 6.12% increase in just 24 hours.
With a market capitalization of $1.92 trillion, Bitcoin has now surpassed silver, which is valued at $1.75 trillion, making it the eighth most valuable asset globally. However, it still has a long way to go to reach gold’s market value of nearly $18 trillion.
