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Today, the Chairman of the Federal Reserve, Jerome Powell, in an exclusive interview with CNBC that Bitcoin competes with gold, not the US dollar.
BREAKING: 🇺🇸 Fed chairman Jerome Powell says #Bitcoin it competes with gold, not the US dollar. pic.twitter.com/YQHFiThTBo
– Bitcoin Magazine (@BitcoinMagazine) 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 don’t use it as a form of payment or as a store of value. It is very flexible. It is not a person competing with the dollar, it is actually competing with gold,” he added.
While it sounds like he may have been offended by his words, saying that no one is using bitcoin as a store of value when that is one of the most used cases today, I agree with his overall position.
As an American living in America, I don’t see BTC competing against the US dollar today. I, along with many other Bitcoiners I know, try to keep as much bitcoin as possible, using it as a store of value. When I use bitcoin, which I do every weekend when I buy beef at the farmer’s market) it’s not bitcoin from my long-term savings that I use. I take dollars from my bank account, buy bitcoin on the Cash App, and send that bitcoin directly to the farmer using the Lightning Network. I feel like I’m spending more dollars in my bank than bitcoin I’m accumulating.
I prefer to spend my dollars, a depreciating asset, and save in bitcoin, which is an expensive asset. Because BTC is not widely accepted where I live, I need dollars in my daily life. I’m also motivated to spend my dollars instead because I can earn more bitcoin by using bitcoin-back rewards apps like Fold and Lolli.
I also choose to keep my wealth in bitcoin over gold. I don’t need gold, as I can’t use it anywhere, and while it maintains value against the dollar, it continues to lose value against bitcoin year after year. It makes no sense for me to hold gold. When it comes to pricing, why would I choose to hold the loser when I know the winner will continue to outperform us?
I would predict that most Americans would choose the dollar over bitcoin today when it comes to a form of exchange. Bitcoin is not in competition 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 cap is still only a fraction of gold, I believe bitcoin will continue to outperform gold. That Powell knows all the properties of Bitcoin, he is right that bitcoin is viewed more as a form of digital gold than a new form of payment in the United States.
This article is a Take it. The views expressed are entirely those of the author and do not reflect those of BTC Inc or Bitcoin Magazine.