Fed Chair Jerome Powell: Bitcoin Is More of a Competitor to Gold Than the Dollar
At The New York Times’ DealBook Summit, Federal Reserve Chair Jerome Powell provided his view on Bitcoin, stating that it is not a competitor to the U.S. dollar, but rather to gold. He described Bitcoin as a highly volatile speculative asset, similar to gold in its use as a store of value but not widely adopted for payments or everyday transactions.
While Bitcoin has remained relatively flat in recent days, Ether (ETH) saw a significant price jump on Wednesday, rising 8% to exceed $3,880. This upward movement was driven in part by the closure of $800 million in short positions, according to Tom Dunleavy from Master Global. Additionally, CoinDesk Senior Analyst James Van Straten highlighted that Ether is benefitting from a surge in capital flows, mirroring trends observed during the 2021 bull run.
Bitcoin’s dominance in the market, which peaked at 61.85% on November 21, has since dropped to 54.84%. Solana’s dominance has also seen a decline. Van Straten noted, “Bitcoin has remained flat, so Ether is playing catch-up,” which has contributed to strong performances across several altcoins in the CoinDesk 20 Index. Despite Bitcoin’s muted reaction, the index rose 1.83%, with notable gains in Ethereum Classic (ETC), Filecoin (FIL), Polkadot (DOT), and Uniswap (UNI), which gained 22%, 18%, 17%, and 16%, respectively, in the last 24 hours.
In his comments, Powell briefly touched on inflation, explaining that the Federal Reserve can take a measured approach in pursuing fiscal neutrality. When asked about Bitcoin’s rise in relation to the U.S. dollar, Powell reaffirmed that Bitcoin is not a direct threat to the dollar but serves as an alternative speculative asset to gold. He also emphasized the need to protect the stability of the banking system and safeguard consumers as cryptocurrencies become more integrated into the financial landscape.
