Despite the difficult macroeconomic environment, the president of the federal reserve Jerome Powell revised his position on Bitcoin, who gave investors a cautious hope of cryptocurrencies.
By comparing gold Bitcoin during an appearance at the top of the New York Times Dealbook, Powell characterized the flagship crypto as a “speculative asset” rather than a direct competitor to the US dollar.
This is a significant difference in its previous disdainful position towards the largest cryptocurrency in the world, which has a market capitalization of around 1.4 billion of dollars.
Powell changes the point of view on Bitcoin
The founder of Binance, Changpeng Zhao (CZ), quickly underlined this evolution as “an improvement in the previous story”, indicating that the leaders of the industry were aware of the rhetorical change of Powell.
It is an improvement in the previous story. Baby steps …
– CZ 🔶 BNB (@cz_binance) February 15, 2025
The specific characterization of bitcoin as “as only … virtual … digital” by Powell implies an increasing adoption of cryptocurrencies in traditional financial frameworks.
What Jerome Powell thinks of Bitcoin👇
Bitcoin is digital gold. This is not there to replace the dollar, but a solid competitor of gold. pic.twitter.com/awbeccq15i
– Kashif raza (@simplykashif) February 15, 2025
Despite this, he said that Bitcoin is unable to question the supremacy of the dollar because of its very volatile nature and its limited use as a payment method.
Economic constraints and difficult cryptographic landscape
The cryptocurrency market currently operates in a context of economic indicators concerning the indications that threaten to delay the planned bull cycle.
In January, the producer prices index (PPI) has reached its highest level since February 2023 to 3.5%, while the Consumer Price Index (IPC) showed a 3% increase in the ‘Inflation, marking its highest level since February 2023.
Despite these challenges, bitcoin was remarkably resilient; On major exchanges, sales volumes 24 hours a day exceeded $ 22 billion. The market value of the cryptocurrency market has increased to around 2.3 billions of dollars in the past two years due to a major institutional investment.
Monetary policy decisions
Powell’s comments, on February 11, reaffirmed the dedication of the federal reserve to quantitative tightening (QT) while resisting the reimplication of quantitative relaxation (QE) until serious economic circumstances. This position has considerable ramifications for risk assets such as cryptocurrencies.
Bitcoin still at $ 96,000
Bitcoin sold above $ 96,000 when writing this article. He had moved between $ 94,000 and $ 95,000.
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