Bitcoin is a competitor to gold, not the US dollar, repeats Fed’s Powell
US Federal Reserve Chairman Jerome Powell has repeatedly stated that bitcoin is a direct competitor to gold and is not a threat to the US dollar.
“People use Bitcoin as a speculative asset. It's like gold, it's just virtual, it's digital,” Powell said on Dec. 4 at the Dell Book Summit hosted by The New York Times in New York.
“People don't use it as a form of payment or as a store of value. It's very volatile. It's not a competitor to the dollar. It's actually a competitor to gold.”
In March 2021, when Bitcoin was trading at just $58,200, the Federal Reserve chairman made these comments, comparing Bitcoin (BTC) to gold at the Bank's March 2021 event for global settlements.
Cryptocurrencies like Bitcoin are highly speculative, and “backed by nothing,” Powell said at the time.
After those comments, Bitcoin increased by 70%, while gold increased by only 52%.
At the DealBook Summit, Powell also shot down the idea that people see Bitcoin as a sign of people's lack of faith in the Federal Reserve and the US dollar.
“I don't think that's how people think about it,” Powell said.
🇺🇸 Jerome Powell:[#Bitcoin] It's not a dollar competitor, it's a gold competitor.” pic.twitter.com/VkZ0dIMUJ6
— Cointelegraph (@Cointelegraph) December 4, 2024
When New York Times reporter Andrew Ross Sorkin asked whether Powell owned bitcoins, he replied, “I'm not allowed to.”
But Powell said it's fine with crypto companies doing business with banks as long as they don't risk their “health and safety.”
Consumer protection was another important consideration for Powell, although the Federal Reserve has announced that it will not directly regulate that area.
Related: Bitcoin has been declared dead 415 times, now it is fighting for $100 thousand
Bitcoin rallied to $99,329 on December 4th – on the verge of breaching its all-time high and surpassing the $100,000 threshold.
Bitcoin's price rally was partially fueled by Donald Trump's presidential election win in November.
Trump's victory led to a reshuffle of the US cabinet: the president-elect chose hedge fund manager Scott Bessant and Cantor Fitzgerald CEO Howard Lutnick to lead the Treasury and Commerce departments, forming what could be the most pro-crito cabinet to date.
Trump was reportedly critical of Powell's decision, but the Federal Reserve chairman said he would not step down if Trump tried to push him.
Meanwhile, Trump has tapped crypto advocate Paul Atkins to chair the Securities and Exchange Commission after Trey Gensler announced on January 20 that he would step down upon Trump's inauguration.
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