Federal Reserve Chair Jerome Powell’s Impact on Bitcoin’s Surge
Jerome Powell, chairman of the US Federal Reserve, made significant comments about cryptocurrency during the New York Times DealBook Summit in New York on Wednesday, Dec. 4, 2024. Powell’s remarks had a notable impact on Bitcoin’s surge to $100,000.
Powell’s Views on Bitcoin
Powell emphasized that he does not and cannot own any cryptocurrency himself. He also stated that the Federal Reserve’s role in regulating Bitcoin and its competitors is limited. Powell highlighted that Bitcoin is not a direct challenge to traditional currencies like the US dollar, but rather to gold. He compared Bitcoin to gold, noting that people primarily use it as a speculative asset, similar to the way gold is utilized.
During an interview with CNBC’s Andrew Ross Sorkin at the DealBook Summit, Powell’s comments brought a sense of legitimacy to Bitcoin in the eyes of many market observers. This newfound credibility helped drive Bitcoin’s value even higher, with the cryptocurrency jumping 4% in morning trading to surpass the $103,000 mark.
Market Analysts’ Perspectives
Market strategist Joel Kruger from LMAX Group expressed that Powell’s comparison of Bitcoin to gold represents a significant development. Kruger believes this comparison adds credibility to Bitcoin as a major asset in global markets. He noted that despite Bitcoin’s significant growth, gold remains about 10 times larger in market value, indicating room for further expansion for Bitcoin.
Bitcoin experienced a substantial rise following Donald Trump’s victory in the presidential election, with the value surging close to 50% as a result of the president-elect’s positive comments on cryptocurrencies. This surge culminated in Bitcoin surpassing the $100,000 mark late Wednesday. In contrast, gold has remained relatively stable since the election, with a 30% increase year-to-date.
Uncertainty Surrounding Powell’s Influence
While Powell’s comments undoubtedly had an impact on Bitcoin’s recent surge, the exact extent of his influence remains uncertain. His remarks coincided with Trump’s nomination of crypto supporter Paul Atkins as the potential chair of the Securities and Exchange Commission, a regulatory position crucial for the crypto industry. This nomination could potentially lead to a smoother market environment, especially given the current SEC leader’s stance against cryptocurrencies.
In conclusion, Powell’s statements on Bitcoin and its comparison to gold have sparked discussions and debates within the financial community. The ongoing developments in the cryptocurrency market, coupled with regulatory changes, continue to shape the future of digital assets in the global economy.
