Fed Chair Jerome Powell Admits Crypto Has “Staying Power” in Win for the Industry
Key takeaways
- Jerome Powell said crypto had “staying power” as an asset at the semi-annual monetary policy committee meeting
- It’s another vote of confidence from the institution as Blackrock confirmed it was opening its first crypto ETF
- Crypto has streaked past the $30,000 dollar mark this week after languishing at the Binance bad news earlier this month
It’s rare these days to hear some good news about crypto, especially from the establishment, but that’s what we got this week when Fed chair Jerome Powell said cryptocurrencies like Bitcoin and Ethereum have “staying power”. Is that a begrudging admittance or a sign of a more mainstream future for crypto? Let’s get into the details.
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What did Jerome Powell say?
Powell spoke at the semi-annual hearing on monetary policy held by the House Financial Services Committee, where all manner of Fed policies are discussed. As the topic turned to cryptocurrencies, he commented, “crypto appears to have staying power as an asset class”.
When asked about stablecoins, Powell repeated his beliefs that the assets are a form of money and therefore, “it would be appropriate to have quite a robust federal role” in regulating it.
As for a central bank digital currency (CBDC), Powell confirmed that any kind of national digital currency was a long way from becoming a reality. But the crypto comments are certainly encouraging for the downtrodden sector.
What’s going on in the crypto market?
All eyes have been on the Bitcoin rollercoaster in 2023 as the entire crypto market was left reeling from the crypto winter and FTX fallout late last year.
Things looked dark again as news emerged the SEC was suing Binance, with Bitcoin’s price languishing around the $25,000 mark, and yet it’s surged back to smash through the $30,000 threshold.
The comeback was down to Blackrock announcing it was launching an ETF that would track the price of Bitcoin. Fidelity is apparently considering a similar move. Paired with Powell’s comments, Bitcoin has hit its highest price yet in 2023. Let’s hope it can sustain the gains this time.
The bottom line
Crypto is, and probably always will be a volatile asset. But despite several attempts from the SEC and institutions to crack down on crypto, it’s shown its popularity time and time again. It looks like the Fed is taking the approach of ‘if you can’t beat them, join them’.
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