United States Federal Reserve Chair Jerome Powell has reiterated his view that Bitcoin is a direct competitor to gold and isn’t a threat to the US dollar.
“People use Bitcoin as a speculative asset. It’s just like gold, only it’s virtual, it’s digital,” Powell said at The New York Times-hosted DealBook Summit in New York on Dec. 4.
“People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar. It’s really a competitor for gold.”
The Federal Reserve Chair has made these comments before, comparing Bitcoin (BTC) to gold during an event hosted by the Bank for International Settlements in March 2021 when Bitcoin was trading at just $58,200.
Cryptocurrencies like Bitcoin are highly speculative, and “they’re not backed by anything,” Powell said at the time.
Since those comments, Bitcoin has soared 70% while gold has increased just 52%.
At the DealBook Summit, Powell also shot down the idea that people view Bitcoin as a symbol 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 asserted.
🇺🇸 JEROME POWELL: "[#Bitcoin] is not a competitor for the dollar, it's a competitor for gold." pic.twitter.com/VkZ0dIMUJ6
— Cointelegraph (@Cointelegraph) December 4, 2024
When New York Times journalist Andrew Ross Sorkin asked Powell whether he owned Bitcoin, he responded: “I’m not allowed to.”
Powell, however, said he is fine with crypto companies doing business with banks as long as they do not threaten their “health and well-being.”
Consumer protection was the other important factor Powell highlighted though he noted the Federal Reserve doesn’t directly regulate that area.
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It comes as Bitcoin rallied to $99,329 on Dec. 4 — within arm’s reach of breaching its all-time high and surpassing the $100,000 milestone.
Bitcoin’s price rally has, in part, been pushed by Donald Trump’s presidential election win in November.
Trump’s win has resulted in an overhaul of the US cabinet, with the President-Elect choosing hedge fund manager Scott Bessent and Cantor Fitzgerald CEO Howard Lutnik to lead the Secretary of Treasury and Commerce departments, shaping up what could be the most pro-crypto cabinet to date.
Trump has reportedly been critical of Powell’s decision making but the Federal Reserve Chair has asserted he won’t resign should Trump try to push him out.
Meanwhile, Trump selected crypto advocate Paul Atkins to become the new chair of the Securities and Exchange Commission after Gary Gensler announced he would resign when Trump is inaugurated on Jan. 20.
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