From decrypt by Logan Hitchcock

At an event Wednesday, Federal Reserve Chairman Jerome Powell called Bitcoin a rival not to the U.S. dollar but rather gold—though not in the sense of BTC similarly being a store of value.

“Bitcoin is not a competitor for the dollar, it’s really a competitor for gold,” Powell said in a sit-down interview with journalist Andrew Ross Sorkin at the New York Times DealBook Summit in New York.

When asked about Bitcoin and how it might reflect people’s faith or lack thereof in the United States dollar or the Federal Reserve itself, Powell commented, “I don’t think that’s how people think about it.” He continued to say that Bitcoin is used as a speculative asset and that he thinks it's too volatile to be a store of value, adding, “It’s like gold, only it’s virtual, it’s digital.”

Powell’s commentary quickly circulated around the crypto community on X (formerly known as Twitter), leading to direct comparisons of the gold and Bitcoin market caps. 

Bitcoin jumped more than 2% in the hours that followed Powell’s talk, breaking $99,000 and pushing towards its all-time high of $99,645 as recorded by CoinGecko in late November. The momentum has cooled since, however, with BTC currently priced at $98,500 as of this writing.

Thanks to its price rise in the last month, Bitcoin is up to a nearly $1.95 trillion market cap, ranking it #7 in global total asset market cap, according to CompaniesMarketCap.com. The leading crypto asset trails only gold and five publicly traded American companies, including Nvidia, Google parent Alphabet, and Facebook parent Meta.

Powell has previously spoken about Bitcoin and crypto in public, indicating in 2021 that Fed wouldn’t ban Bitcoin, and later suggesting that BTC and crypto had “staying power” as an asset class in 2023. 

When asked Wednesday if he would ever own crypto himself, Powell responded, “I’m not allowed to.” 

In his interview with Sorkin, Powell also spoke about the independence of the Federal Reserve, the transparency of the Fed, inflation, geopolitical risk, and more. 

The New York Times DealBook Summit is a day-long program with live interviews of cultural, business, and political leaders. Other interviews on the agenda included OpenAI CEO Sam Altman, Amazon founder Jeff Bezos, and former President Bill Clinton.