Federal Reserve Chairman Jerome Powell has dismissed the idea that Bitcoin could replace the U.S. dollar, likening the cryptocurrency to gold as a speculative asset rather than a store of value.

Powell shared these views during his appearance at The New York Times DealBook Summit in Manhattan.

Powell’s Argument

When asked whether Bitcoin’s popularity reflects a lack of faith in the U.S. dollar or the Federal Reserve, Powell said, “I don’t think that’s how people think about it.” He went on to describe Bitcoin as a highly volatile asset used for speculation rather than as a stable store of value.

“It’s just like gold, only it’s virtual,” Powell said. “It’s very volatile, it’s not a competitor for the dollar, it’s really a competitor for gold.”

These remarks come at a time of heightened speculation about Bitcoin’s role in global finance. It has seen a significant price rise in recent weeks, driving its market capitalization to over $2 trillion.

According to CompaniesMarketCap.com, the cryptocurrency is now the seventh-largest asset globally. Bitcoin ranks behind gold, which has an estimated market value of $18 trillion, and five major American companies, including Nvidia, Alphabet, and Meta.

Powell’s conservative stance on Bitcoin and other cryptocurrencies is consistent with his previous statements. In 2021, he similarly criticized Bitcoin for its volatility, arguing that it failed to serve as a reliable store of value or medium of exchange.

At the time, he referred to all cryptocurrencies as speculative investments that would not replace the dollar but could rival gold as an alternative asset.

Following the 71-year-olds reappointment as Federal Reserve Chair in 2021, Galaxy Digital CEO Mike Novogratz expressed concerns, stating that his leadership would likely hinder market growth.

“People are getting pretty bearish on crypto,” Novogratz said at the time.

Concerns Under Powell’s Leadership

Under Biden’s administration, the Federal Reserve has been accused of playing a key role in “Operation Chokepoint 2.0,” an alleged effort to stop the growth of the U.S. cryptocurrency industry by cutting crypto firms access to traditional banking services.

In August 2024, these allegations were reignited after the Fed directed Customers Bank, a crypto-friendly institution, to tighten its risk management and compliance measures. This prompted Gemini co-founder Tyler Winklevoss to declare that Operation Chokepoint 2.0 “is alive and well.”

Crypto’s banking issues began years ago, intensifying after the collapse of FTX, which triggered stricter regulations against blockchain companies.

This included mandates from the OCC, FDIC, and Federal Reserve that discouraged banks from serving crypto firms. As a result of this, many crypto-friendly banks like Silvergate Bank, Signature Bank, and Silicon Valley Bank have since been forced to close.