The chairman of the Fed likened Bitcoin to gold, saying it is not a rival to the dollar.

Federal Reserve Chairman Jerome Powell has dismissed the idea that bitcoin could replace the US dollar, likening the cryptocurrency to a speculative asset worth gold.

Powell shared these views while attending the New York Times DealBook Summit in Manhattan.

Paul's argument

Asked whether Bitcoin's popularity reflects a lack of confidence in the U.S. dollar or the Federal Reserve, Powell said, “I don't think people think about it that way.” He explained that Bitcoin is not a stable store of value but a highly volatile asset used for speculation.

“It's like gold, only the illusion,” Powell said. “It's very volatile, it's not a competitor to the dollar, it's actually a competitor to gold.”

These comments come amid heightened speculation about Bitcoin's role in global finance. In recent weeks, prices have risen sharply, pushing the market capitalization to more than $2 trillion.

According to CompaniesMarketCap.com, cryptocurrency is now the seventh-largest asset globally. Bitcoin has an estimated market value of $18 trillion compared to gold and five major US companies including Nvidia, Alphabet and Meta.

Powell's conservative stance is consistent with his previous statements on Bitcoin and other cryptocurrencies. In the year 2021 similarly criticized Bitcoin for its volatility, arguing that it did not serve as a reliable store of value or currency.

At the time, he referred to all cryptocurrencies as speculative investments that do not replace the dollar but can compete with gold as an alternative asset.

Following the 71-year-old's appointment as Federal Reserve chairman in 2021, Galaxy Digital CEO Mike Novogratz expressed concern that his leadership could stifle market growth.

“People are getting pretty good at crypto,” Novogratz said at the time.

Threats under Powell's leadership

The Federal Reserve has been accused of playing a key role in “Operation Chokepoint 2.0” under the Biden administration.

In the year In August 2024, these allegations resurfaced after the Fed ordered Consumer Bank, a crypto-friendly institution, to strengthen risk management and compliance measures. This prompted Gemini founder Tyler Winklevoss to announce that Operation Chocpon 2.0 is “alive and well.”

Crypto banking issues started years ago and intensified after the FTX collapse triggered stricter regulations on blockchain companies.

This includes orders from the OCC, FDIC and the Federal Reserve to prevent banks from servicing crypto companies. As a result, many crypto-friendly banks such as Silvergate Bank, Signature Bank, and Silicon Valley Bank were forced to close.