Fed Chair Compares Bitcoin to Gold, Says It’s No Rival to the Dollar

Federal Reserve Chairman Jerome Powell has dismissed the idea that Bitcoin could replace the US dollar, comparing the cryptocurrency to gold as a speculative asset rather than a store of value.

Powell shared these views during his appearance at The New York Times DealBook Summit in Manhattan.

Powell’s argument

When asked if Bitcoin’s popularity reflects a lack of faith in the U.S. dollar or the Federal Reserve, Powell said, “I don’t think that’s the way people think.” He went on to describe Bitcoin as a highly volatile asset used for speculation rather than a stable store of value.

“It’s like gold, only it’s virtual,” Powell said. “It’s very volatile, it’s not a competitor for the dollar, it’s really a competitor for gold.”

These remarks come at a time of heightened speculation about Bitcoin’s role in global finance. It has seen a significant price increase in recent weeks, bringing its market cap to over $2 trillion.

According to CompaniesMarketCap.com, the cryptocurrency is now the seventh largest asset in the world. Bitcoin is behind gold, which has an estimated market value of $18 trillion, and five major US companies, including Nvidia, Alphabet and Meta.

Powell’s conservative stance on Bitcoin and other cryptocurrencies is consistent with his previous statements. In 2021, he similarly criticized Bitcoin for its volatility, arguing that it did not serve as a reliable store of value or medium of exchange.

At the time, he referred to all cryptocurrencies as speculative investments that would not replace the dollar but could rival gold as an alternative asset.

Following the 71-year-old’s re-election as Federal Reserve chairman in 2021, Galaxy Digital CEO Mike Novogratz expressed concern, saying his leadership would likely hinder market growth.

“People are becoming quite bearish on crypto,” Novogratz said at the time.

Concerns under Powell’s leadership

Under the Biden administration, the Federal Reserve has been accused of playing a key role in “Operation Chokepoint 2.0,” an alleged effort to halt the growth of the US cryptocurrency industry by cutting off access to crypto companies to traditional banking services.

In August 2024, these allegations reignited after the Fed directed Customers Bank, a crypto-friendly institution, to tighten its risk management and compliance measures. This prompted Gemini co-founder Tyler Winklevoss to declare that Operation Chokepoint 2.0 is “alive and well.”

Crypto’s banking woes began years ago, intensifying after the collapse of FTX, which led to tighter regulations against blockchain companies.

This included mandates from the OCC, the FDIC, and the Federal Reserve that discouraged banks from serving crypto companies. As a result, many crypto-friendly banks such as Silvergate Bank, Signature Bank, and Silicon Valley Bank have been forced to close.

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