Chairman of the Federal Reserve, Jerome Powell, on Monday reaffirmed his belief that the world’s oldest cryptocurrency is a gold substitute but it is too volatile and is “backed by nothing” for it to replace the U.S. dollar. And it won’t essentially replace a digital dollar.
Bitcoin Has No Chance Of Dethroning The Dollar
Speaking during a virtual panel discussion hosted by the Bank for International Settlements (BIS) on Monday, Powell touched on various topics, including the rise of bitcoin, the digital dollar, and stablecoins.
Regarding bitcoin, the Fed chair observed that it is a “speculative asset”, explaining:
“Crypto-assets—see Bitcoin—are highly volatile and therefore, not useful as a store of value. They are not backed by anything, they’re more of an asset for speculation.”
Powell then went on to draw comparisons between bitcoin and gold, suggesting that the crypto could be considered a replacement for the precious metal. Notably, this is an opinion shared by most observers who tout the flagship crypto as “digital gold”. Gold has long been viewed as an effective store of value against uncertainties. Its value surges against inflation and it actually moves independently of other asset classes. With bitcoin, some experts claim that it is even better at being gold than gold.
It’s worth noting that this is not the first time the Federal Reserve chair has compared bitcoin to gold. During an interview in July 2019, Powell referred to bitcoin as a “speculative store of value, like gold”. …
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