- Jerome Powell equates Bitcoin’s role to gold.
- Market response underlines Bitcoin’s safe-haven appeal.
- Institutional investments in Bitcoin ETFs increase.
Federal Reserve Chair Jerome Powell reiterated in a CNBC interview that Bitcoin is akin to digital gold, positioning it as gold’s competitor rather than the US dollar.
Powell’s stance elevated Bitcoin’s appeal as a safe-haven asset, driving significant institutional investment, evidenced by $1 billion inflows into Bitcoin ETFs.
The Federal Reserve Chair, Jerome Powell, compared Bitcoin to gold, implying its role as a speculative asset rather than a currency. This official statement was made during a CNBC interview in December 2024.
Powell stated that Bitcoin is a competitor to gold rather than the US dollar, highlighting its use as a digital, speculative asset. This comparison has not been echoed by other central bankers or crypto leaders.
Jerome Powell, Chair, U.S. Federal Reserve, stated, “Bitcoin is a competitor to gold, not the US dollar. People use bitcoin as a speculative asset — it’s like gold. It’s just like gold, only it’s virtual, it’s digital. People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar, it’s really a competitor for gold.” – source
The announcement led to increased institutional interest, with Bitcoin ETF inflows exceeding $1 billion in a day. This interest highlights enhanced perceptions of Bitcoin as a potential safe-haven asset, akin to gold.
Powell’s remarks signify a shift in how retail and institutional investors approach Bitcoin, reallocating assets from traditional securities like stocks and treasuries towards Bitcoin during volatile market periods.
Bitcoin’s market perception continues to evolve, with gold viewed as its primary competitor. This perception affects market behavior, aligning with elevated Bitcoin prices as gold also sees high valuations.
Financial outcomes could include further institutional inflows into Bitcoin, potentially driving regulatory bodies to reconsider classifications. Historical patterns and ETF inflows solidify Bitcoin’s narrative as digital gold.
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