Federal Reserve Chairman Jerome Powell speaks at the New York Times DealBook Summit held at Jazz at Lincoln Center in New York, USA, on Wednesday, December 4, 2024.
Yuki Iwamura | Bloomberg | Getty Images
Bitcoin’s rapid rise may have received an extra boost from an unlikely source: the Chairman of the Federal Reserve Jerome Powell.
In comments regarding cryptocurrencies on Wednesday, the central banker noted that he does not and cannot own any cryptocurrencies himself. Additionally, he said the Fed has a limited role in regulating Bitcoin and its competitors.
However, he also insisted Bitcoin This is not a challenge to traditional currencies such as the U.S. dollar, but to gold.
“People are using Bitcoin as a speculative asset,” Powell told CNBC’s Andrew Ross Sorkin in an interview with The New York Times. DealBook Conference. “It’s just like gold, except it’s virtual, it’s digital. People are not using it as a payment method or a store of value. It’s very volatile. It’s not a competitor to the dollar, it’s actually gold. competitors.
For those paying attention to the cryptocurrency market, Powell’s comments (whether unintentional or not) provided a sense of legitimacy to Bitcoin and helped push it further higher. Bitcoin rose 4% early Thursday Breaking through the $103,000 mark.
The rise of Bitcoin
Joel Kruger, market strategist at LMAX Group, said: “We believe that the Fed chairman comparing Bitcoin to gold is a significant development because it adds a level of credibility to Bitcoin as a major asset in global markets. ” Cryptocurrency trading.
He added: “The fact that gold is still worth about 10 times more than Bitcoin should give us further insight into how much room Bitcoin has to grow from current levels.”
Bitcoin rose sharply at the start of the year and subsequently traded in wild but narrow ranges — until Donald Trump won the presidential election on November 5. The currency soared nearly 50%. In contrast, gold The index has been essentially flat since the election but is up nearly 30% so far this year.
To be sure, the extent to which Powell’s comments spurred the final move is unknown.
On the same day that he compared Bitcoin to Bitcoin, Trump officially announced his widely expected intentions Nominated financier Paul AtkinsAs chairman of the U.S. Securities and Exchange Commission, he is also a strong supporter of cryptocurrencies.
The position is a key regulatory position that could provide for smoother market operations, especially after current SEC leader Gary Gensler became an enemy of the cryptocurrency industry.
