In a recent interview with CNBC, Jerome Powell, Chairman of the US Federal Reserve, stated that gold's main competitor is Bitcoin.
Powell made statements that have caused a stir in the cryptocurrency world, Claiming Bitcoin is “digital gold” and establishing a clear analogy between the most well-known cryptocurrency in the crypto market and the precious metal.
During the interview, the Fed chairman said that Bitcoin is the main competitor of gold, calling the cryptocurrency virtual gold.
His statements have been interpreted as a recognition of Bitcoin as a legitimate investment asset; furthermore, they have had a significant impact on the cryptocurrency market.
Powell's remarks boost Bitcoin price
Several experts such as Nikolaus Hoffman, editor-in-chief of Bitcoin Magazine, have commented on these statements, highlighting the importance of this recognition by Powell for the world's leading and most capitalized cryptocurrency. According to Hoffman, as a central figure in US monetary policy, Powell's words carry considerable weight in financial markets. So, by equating Bitcoin with gold, the Fed Chairman is validating many investors' perception that cryptocurrency can serve as a a store of value and a safe haven asset in times of economic uncertainty.
The impact of these statements on the price of Bitcoin was immediate, driving the cryptocurrency to a new all-time high price above $100.000. On December 5, Bitcoin set a new ATH of $103.900 dollars and it seems to be very close to breaking this milestone and setting a new ATH above six figures.
Powell's remarks have sparked a wave of optimism among investors, primarily because cryptocurrency is increasingly being recognized and accepted as an alternative to gold.
Bitcoin is the competition for gold, not the dollar
From Powell's perspective, Bitcoin does not compete directly with the US dollar, but with gold. Although he assured that Bitcoin is not widely used as a store of value due to its volatility, Powell stressed that the main use case of the cryptocurrency is precisely to be an alternative to gold.
In a report Recently, Hoffman said that Powell seems to have tripped over his own words, as the high demand for Bitcoin as a store of value asset is increasingly evident in the market, mainly in the adoption by large companies and investment funds.
To date, companies such as MicroStrategy, Marathon, Block, Tesla, Metaplanet, Semler Scientific, and more recently Rumble and SOS, among others, have invested significantly in Bitcoin. These companies see the cryptocurrency as a way to protect their assets against the inflation and volatility of fiat currencies.
MicroStrategy, led by Michael Saylor, has been a pioneer in the adoption of Bitcoin as a corporate store of value. The company has invested billions of dollars in Bitcoin, becoming the largest institutional holder of the leading cryptocurrency. Saylor has been a vocal proponent of Bitcoin, arguing that it is a superior way to store value compared to gold due to its portability, divisibility and security.
Other companies, such as Metaplanet and Semler Scientific, have followed the lead of MicroStrategy, whose investment strategy has been crucial in legitimizing Bitcoin as a viable option for businesses, inspiring others to consider similar investments in the cryptocurrency.
Recently, Rumble, an alternative video platform to YouTube, has announced that it will invest in Bitcoin. Like others, the company has expressed its trust in cryptocurrency as a way to protect their assets and has highlighted the importance of diversifying its reserves of value.
In addition, Microsoft could also be considering investing in Bitcoin after the request of its shareholders and the presentation Saylor made this weekThe tech company, which said it was addressing shareholder demand to invest in Bitcoin, has come under pressure to explore adopting the cryptocurrency as part of its financial strategy. If Microsoft’s Board of Directors decided to incorporate Bitcoin into its financial strategy as a reserve asset, this could have a significant impact on the crypto market.
The United States and the creation of a National Strategic Bitcoin Reserve
In addition to institutional adoption, states are also weighing the possibility of investing in cryptocurrency as a reserve asset of value. Specifically, the United States could declare Bitcoin as one of its reserve assets under the Trump administration, which has been a topic that has gained traction in financial circles. Although this idea is still in its early stages, Powell’s recognition of Bitcoin as “digital gold” could be an important step in this direction.
The adoption of Bitcoin as a reserve asset by the United States would have significant implications for the global economy. First, would increase the legitimacy of Bitcoin as a reserve currency, driving demand for the cryptocurrency among investors.
Secondly, the acceptance of Bitcoin by the United States could encourage adoption on a global level. If the most powerful country in the world recognizes the market-leading cryptocurrency as a reserve asset, other countries could follow suit. In this scenario, Bitcoin would undoubtedly completely transform the global financial landscape.
