Jerome Powell, Chairman of the US Federal Reserve, lately dismissed hypothesis that the Fed might add Bitcoin to its reserves. On the finish of his two-day assembly, Powell mentioned the Fed was not allowed to personal Bitcoin and didn’t need to become involved in a authorities initiative to create a stockpile of the digital asset.
The Bitcoin announcement comes after the Fed introduced charge cuts whereas signaling unsure financial insurance policies over the approaching months. Powell's announcement got here as a shock as President Donald Trump introduced the nominations of key pro-crypto figures. The market instantly reacted to Powell's assertion, sending the worth of Bitcoin down by 5.7%. Different high altcoins like XRP have additionally misplaced worth.
Powell rejects plan so as to add BTC to reserves
Debates over whether or not it's time to construct a Bitcoin inventory gained momentum after Donald Trump secured a victory and one other presidency. Trump used Bitcoin and crypto as a part of his marketing campaign to draw help from crypto figures and commentators. And by appointing key pro-crypto figures to high authorities positions and promising to reorganize SEC management, many anticipate to foretell a Bitcoin inventory quickly.
Powell says Fed can't maintain Bitcoin, and isn't trying to change that https://t.co/72RQGK1Q6K
– ST Enterprise Desk (@stbusinessdesk) December 18, 2024
Nonetheless, Powell categorically said that the US banking system can not maintain Bitcoin. He argued that in keeping with the Federal Reserve Act, there are guidelines on what banks can personal and that Bitcoin isn’t included within the listing.
He introduced that they weren’t trying to change the regulation anytime quickly and that it was as much as Congress to resolve.
Curiosity in Bitcoin Strategic Reserve Continues to Develop
Regardless of the Fed Chairman's views on Bitcoin as a reserve asset, Bitcoin as a possible reserve asset is attracting growing consideration. In the course of the election, Trump supported the proposal and even prompt that the USA turn into the middle of crypto growth. Different pro-Bitcoin policymakers, like Wyoming Senator Cynthia Lummis, have campaigned for Bitcoin to be thought-about a reserve. `
Earlier this yr, Lummis filed a invoice requiring the U.S. Treasury to buy and add Bitcoin to the reserve. Below the Lummis invoice, the US Treasury will undertake a program to buy 20,000 BTC per yr for 5 years till the reserve comprises 1 million tokens.
BTC worth down within the final 24 hours. Supply: Coingecko
Bitcoin worth falls after Powell's assertion
The market reacted negatively to Powell's assertion, with the worth of Bitcoin falling to $100,300, down about 5.7% from the day before today's shut. At press time, Bitcoin's 24-hour buying and selling worth is between $98,839 and $105,306.
Different main cryptocurrencies adopted Bitcoin's lead, with Ethereum falling 6.8%, Solana falling 8.1% and Binance Coin shedding 4.6% in worth. Dogecoin was the worst performer among the many high altcoins, falling to $0.348, a lack of 11%. Moreover, the inventory market fell after the Fed official's assertion. The Nasdaq 100 fell 2% and S&P ended the session with a lack of 1.55%.
Featured picture from Pexels, chart from TradingView
