U.S. Federal Reserve President Jerome Powell said recently that he considers Bitcoin an alternative to gold instead of the dollar.
Speaking during the Bank of International Settlements Innovation Summit event, Powell said that Bitcoin was too volatile to replace traditional fiat currencies like the U.S. dollar. He supported the idea of Bitcoin as a digital gold that could have similar utility to precious metals.
Jerome called Bitcoin a “speculative asset” and highlighted the market’s volatility for cryptography:
“Cryptoassets are highly volatile – see Bitcoin – and therefore are not very useful as a store of value and are not supported 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 are more of an asset for speculation, so they are not particularly in use as a means of payment. It is more of a speculative asset. It is essentially a substitute for gold, not for the dollar. ”
Powell had compared Bitcoin to gold, saying in 2019 that the flagship cryptocurrency is a “speculative store of value, like gold”
Powell also highlighted what he considers the main problems of Bitcoin:
“I think that with crypto-assets, the public needs to understand the risks. There is volatility. There are also energy requirements for mining and the fact that they are not supported by anything. “
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