The Chairman of the U.S. Federal Reserve, Jerome Powell, has dismissed the notion that Bitcoin’s rise challenges the dominance of the U.S. dollar. Instead, he emphasized that Bitcoin is more comparable to gold and presents potential risks to it, but it does not pose any threat to the dollar.
Speaking at a New York event on December 4, Powell said, “People treat Bitcoin as a speculative asset, much like gold, but it’s simply another fascination.” He added that Bitcoin is not widely used for payments or as a reliable store of value due to its price volatility. While it does not affect the dollar’s stability, it could impact gold markets.
Powell had previously made similar remarks in 2021, when Bitcoin traded at $58,200. At the time, he stated, “Cryptocurrencies are extremely volatile and lack intrinsic value.” Following those comments, Bitcoin surged by 70%, while gold experienced a 52% increase.
When asked by a New York Times reporter if he owned any Bitcoin, Powell responded, “I am not allowed to.” He also clarified that the Federal Reserve does not oversee the direct security of crypto users, though he acknowledged no concerns about crypto firms interacting with banks unless they threaten financial stability.
Bitcoin’s recent surge past $100,000, after briefly dipping to $99,000, has been linked to Donald Trump’s electoral win and his pro-crypto policies. Trump’s appointment of crypto-friendly figures, including Paul Atkins as SEC chair, signals strong support for the industry. Additionally, his new cabinet includes notable financial figures like Scott Bessent and Howard Lutnick, further bolstering crypto’s future.
Powell maintained that he would not resign even if Trump sought his removal, showcasing the ongoing tension between the administration and the Federal Reserve’s policies.
