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Today, Federal Reserve Chairman Jerome Powell said in an exclusive interview with CNBC that bitcoin competes with gold, not the US dollar.
<blockquote class="twitter-tweet”>
BREAKING: Federal Reserve Chairman Jerome Powell says <a target="_blank" href="https://twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin It is a competitor to gold, not the US dollar. pic.twitter.com/YQHFiThTBo
– bitcoin Magazine (@BitcoinMagazine) <a target="_blank" href="https://twitter.com/BitcoinMagazine/status/1864389896489607410?ref_src=twsrc%5Etfw”>December 4, 2024
“People use bitcoin as a speculative asset; it's like gold,” Powell said.
“It's like gold, only it's virtual, it's digital. People do not use it as a form of payment or as a store of value. It is very volatile. “It is not a competitor for the dollar, but really a competitor for gold,” he added.
While you seem to have stumbled over your own words, saying that no one uses bitcoin as a store of value when that is literally one of its most prominent use cases today, I agree with your general position.
As an American living in the United States, I don't think btc competes with the US dollar today. I, along with many other Bitcoiners I know, are trying to accumulate as much bitcoin as we can, using it as a store of value. When I spend bitcoins, which I do every weekend when I buy beef at the farmers market, it's not the bitcoins from my long-term savings that I spend. I take dollars out of my bank account, buy bitcoins on Cash App, and send those bitcoins directly to the farmer via the Lightning Network. I feel like I'm basically spending my bank dollars instead of the bitcoins I hoard.
I'd rather spend my dollars, a depreciating asset, and save in bitcoins, an appreciating asset. Because btc is not widely accepted where I live, I need dollars in my daily life. It also incentivizes me to spend my money because I can also earn more bitcoins using bitcoin cashback rewards apps like Fold and Lolli.
I also prefer to store my wealth in bitcoins rather than gold. I don't need gold, since I can't spend it anywhere, and although it maintains its value against the dollar, it continues to lose value against bitcoin year after year. It doesn't make sense for me to have gold. When it comes to price appreciation, why would I choose to hold a loser when I know the winner will continue to outperform?
I would predict that the overwhelming majority of Americans today would choose the dollar over bitcoin when it comes to a medium of exchange. bitcoin does not compete with the dollar today. But when it comes to choosing a store of value, gold or bitcoin, I think bitcoin is the clear winner. Although bitcoin's market capitalization is still only a fraction of that of gold, I believe bitcoin will continue to be seen as superior to gold. If Powell is aware of all the properties of bitcoin, he is right that bitcoin is seen much more as a digital form of gold than as a new monetary mechanism for payments in the United States.
This article is a Carry. The opinions expressed are entirely those of the author and do not necessarily reflect those of btc Inc or bitcoin Magazine.
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