Fed Chairman Jerome Powell Says Bitcoin Is a Substitute for Gold

Federal Reserve Chairman Jerome Powell sees cryptocurrency as a substitute for gold, rather than the dollar. However, he cautioned that crypto assets, including bitcoin, are highly volatile and not useful as a store of value.

Fed Chair Sees Bitcoin as a Gold Substitute

During a webinar sponsored by the Bank of International Settlements (BIS) on Monday, Federal Reserve Chairman Jerome Powell talked about cryptocurrency, mentioning bitcoin in particular.

The Fed chair detailed: “Crypto assets are highly volatile, see bitcoin, and therefore are not really useful as a store of value. And, they are not backed by anything. They are more of an asset for speculation. They are also not particularly in use as a means of payment.” He elaborated:

It’s more a speculative asset. It’s essentially a substitute for gold, rather than for the dollar.

Powell proceeded to say that with crypto assets, “the public needs to understand the risks. The principal thing is there’s the volatility. There’s also the outsized energy requirement for mining, and the fact that they’re not backed by anything.”