Jerome Powell, the chairman of the US Federal Reserve, recently dismissed speculation that the Fed might add Bitcoin to its reserves. At the end of its two-day meeting, Powell said that the Fed is not allowed to own Bitcoin and does not want to get involved in any government initiative to create a mass of digital assets.
Bitcoin’s announcement comes after the Fed announced a rate cut while signaling uncertain monetary policies for the next few months. Powell’s announcement came as a surprise when President Donald Trump announced key crypto-friendly appointments. The market reacted quickly to Powell’s statement, sending the price of Bitcoin down 5.7%. Other top altcoins like XRP are also losing value.
Powell Thumbs Down Plans to Add BTC to Reserves
Arguments that it’s time to make a lot of Bitcoin gained momentum after Donald Trump secured a win and another presidency. Trump used Bitcoin and crypto as part of his campaign to attract support from crypto people and analysts. And by appointing key crypto-friendly people to top government positions and promising to renew the leadership of the SEC, many expect to predict the Bitcoin stock soon.
Powell says the Fed can’t hold Bitcoin, doesn’t want to change that
– ST Business Desk (@stbusinessdesk) December 18, 2024
However, Powell clearly states that the US banking system cannot hold Bitcoin. He said that according to the Federal Reserve Act, there are rules about where banks can belong, and Bitcoin is not included in the list.
He announced that he is not looking to change the law soon, and it is up to Congress to decide.
Interest in the Bitcoin Strategic Reserve continues to grow
Despite the Fed chairman’s view of Bitcoin as a reserve asset, there has been growing attention to Bitcoin as a potential reserve asset. During the election, Trump supported this proposal and even suggested that the US should be the center of crypto development. Some pro-Bitcoin policymakers, such as Wyoming Senator Cynthia Lummis, have been campaigning for Bitcoin to be considered a last resort. `
Earlier this year, Lummis introduced a bill asking the US Treasury to buy and add Bitcoin to the reserve. Under the Lummis bill, the US Treasury will adopt a plan to buy 20,000 BTC every year for five years until the treasury holds 1 million tokens.
BTC price down in the last 24 hours. Source: CoingeckoÂ
Bitcoin Price Drops After Powell’s Statement
The market reacted negatively to Powell’s statement, Bitcoin price fell to $100,300, down about 5.7% from the previous day’s close. As of press time, Bitcoin’s 24-hour trading range is between $98,839 and $105,306.
Other top cryptos followed Bitcoin’s lead, Ethereum fell by 6.8%, Solana by 8.1%, and Binance Coin shed 4.6% in value. Dogecoin was the worst performer among the top altcoins, falling to $0.348, or a loss of 11%. Also, the stock market fell after the Fed official’s statement. The Nasdaq 100 fell 2%, while the S&P ended the trading day with a 1.55% loss.
Featured image from Pexels, chart from TradingView