Federal Reserve Chairman Jerome Powell has made a significant shift in his stance on Bitcoin. At the New York Times DealBook Summit, he compared Bitcoin to gold, marking a notable evolution in the Fed’s perspective on cryptocurrencies.
A Pivotal Moment for Bitcoin
Powell’s characterization of Bitcoin as ‘digital gold’ represents a major departure from his previous skepticism. He views Bitcoin as a speculative asset rather than a threat to the US dollar. This new position could boost institutional confidence in cryptocurrencies.
Market Impact and Price Action
Bitcoin trades above $96,000 amid this development. The crypto market shows remarkable resilience despite challenging economic conditions. The total crypto market cap has grown to $2.3 trillion, driven by institutional investment.
Economic Context
January’s economic indicators present a mixed picture. The PPI reached 3.5%, while CPI showed 3% inflation. These figures mark the highest levels since February 2023. The Fed maintains its commitment to Quantitative Tightening.
Industry Response
Binance’s founder CZ welcomed Powell’s comments as progress. The crypto community sees this as validation of Bitcoin’s role in the financial system. Institutional adoption could accelerate following these remarks.
Future Implications
Powell’s acknowledgment could pave the way for broader crypto acceptance. However, he maintains that Bitcoin’s volatility limits its use as a payment method. This position suggests a coexistence rather than competition with traditional currency.
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Tags: Bitcoin, Federal Reserve, Digital Gold, Cryptocurrency, Monetary Policy
Source: Bitcoinist