2021-03-26 10:44:03
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Federal Reserve Chairman Jerome Powell recently said he sees Bitcoin as an alternative to gold rather than an alternative to the dollar.
In a statement at the Bank for International Settlements’ Innovation Summit event, Mr Powell said that Bitcoin is too volatile to replace traditional fiat currencies like the US dollar, but he backs the idea Think of Bitcoin as a digital gold that could have a utility similar to that of a precious metal.
Jerome calls Bitcoin “speculative assets” and emphasizes the volatility of the cryptocurrency market:
Cryptocurrencies are very volatile – look at Bitcoin – and therefore not very useful to see them as a store of value and they are not backed by anything.
Jerome went on to say that Bitcoin is an “asset for speculation” and is not particularly useful as a means of payment:
They act like an asset for speculation, so they should not be specifically used as a means of payment. It’s more of a speculative asset. It is essentially an alternative to gold rather than to the dollar.
In 2019, Powell compared Bitcoin to gold by saying that the leading cryptocurrency is a “speculative store of value, like gold”.
Powell also emphasized on what he considers Bitcoin’s main problem:
I think with crypto assets, the public needs to understand the risks. There is variation. There are also energy requirements for mining and the fact that they’re not backed by anything.
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