Today, Federal Reserve Chairman Jerome Powell said in an exclusive interview with CNBC that Bitcoin competes with gold, not the US dollar.
BREAKING: ๐บ๐ธ Fed Chairman Jerome Powell says #Bitcoin is a competitor to gold, not the US dollar. pic.twitter.com/YQHFiThTBo
โ Bitcoin Magazine (@BitcoinMagazine) December 4, 2024
โPeople use bitcoin as a speculative asset โ it’s like gold,โ Powell said.
โIt’s just like gold, only it’s virtual, it’s digital. People don’t use it as a means of payment or as a store of value. It is very volatile. It is not a competitor to the dollar, it is really a competitor to gold,โ he added.
While it sounds like he has stumbled on his own words that no one is using Bitcoin as a store of value when that is literally one of its most prominent uses today, I agree with his overall position.
As an American living in America, I don’t feel like BTC competes with the US dollar today. Myself, along with many other Bitcoiners I know, are trying to store as much Bitcoin as we can, using it as a store of value. When I spend bitcoin, which I do every weekend when I buy beef at the farmers market, it’s not the bitcoin from my long-term savings that I’m spending. I take dollars from my bank account, buy bitcoin through Cash App, and send that bitcoin directly to the farmer through the Lightning Network. I feel like I’m actually spending the dollars in my bank instead of the bitcoin I’m hoarding.
I prefer to spend and save my dollars, a depreciating asset, in bitcoin, a depreciating asset. Since BTC is not widely accepted where I live, I need dollars in my daily life. I am also incentivized to spend my dollars because by using them I can also earn more bitcoin bitcoin-back rewards apps like Fold and Lolli.
I also prefer to keep my assets in bitcoin than in gold. I don’t need gold because I have nowhere to spend it, and while it holds its value against the dollar, it continues to lose value against bitcoin year after year. It makes no sense for me to hold gold. When it comes to price appreciation, why would I pick a loser when I know the winner will continue to outperform?
I predict that the overwhelming majority of Americans today would choose the dollar over bitcoin when it comes to a medium of exchange. Bitcoin does not currently compete with the dollar. But when it comes to choosing a store of value, gold or bitcoin, I think bitcoin is the clear winner. Although Bitcoin’s market cap is still only a fraction of gold’s, I believe Bitcoin will still be seen as superior to gold. Whether or not Powell is aware of all of Bitcoin’s properties, he is correct that Bitcoin is seen much more as a digital form of gold than as a new monetary payment mechanism in the United States.
This article is a To take. The opinions expressed are solely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.