Jerome Powell, President of the US Federal Bank (FED), said that he accepted Bitcoin as a means of a value storage, but he did not see it as a competitor for the dollar. Powell’s statement created a new wave of optimism in the crypto market. Increased inflation and Fed’s strict monetary policy increases Bitcoin’s pressure on future price movements, while Powell’s changing attitude attracts attention.
Bitcoin’s location: Digital gold or a real currency?
Speaking at the New York Times Dealbook Summit, Jerome Powell expressed his perspective on Bitcoin with the following words:
“People use Bitcoin as a speculative being. Like gold, but only in a virtual and digital form. It is not widely used as a payment tool or value storage tool. It has an extremely wavy structure and is not a competitor for the dollar, but in fact competitor. ”
Changpeng Zhao (CZ), the founder of Binance, shared this view of Powell, “This is a development according to his previous discourses. We are moving with small steps. “commented. However, Powell continued to emphasize that Bitcoin did not pose a direct threat to the US dollar due to his high volatility and a limited payment tool.
Macroeconomic Conditions Forcing Bitcoin
The crypto market continues to face fluctuations due to expanding macroeconomic pressures. The US consumer price index (CPI) announced in January increased by 3 %, while the Producer Price Index (PPI) increased by 3.5 %to its highest level since February 2023.
This increasing inflation and Fed’s postponement of interest rate cuts constitute an obstacle in front of the expected crypto bull season. However, towards the end of the week, the recovery signals in Bitcoin and crypto markets began to be seen, which increased speculation on the possibility of a new rise among investors.
What will be the next step for Bitcoin?
Powell’s speech on February 11, the FED, only under extreme economic conditions, a new monetary expansion (QE) policy can be directed to the policy said. Currently, while the monetary contraction (QT) policy continues, the lack of interest rates on the table creates uncertainty on the short -term appearance of Bitcoin.
Powell’s recognition of Bitcoin as a value -storage tool caused investors to think about the possibility of more corporate adoption in the long run. However, the strict monetary policies of the FED shows that the crypto market may go through a challenging process in the coming period.
