Bitcoin plummets, giving up the $55,000 after US Fed Chairman, Jeremy Powell speech. As of 7 a.m. on the 23rd (GMT+8), Bitcoin is recording $54,692 at Coin Market Cap in the U.S.. It is down 6.04% from 24 hours ago.
Bitcoin was barely at around $55,000 at 5:30 a.m., recording $55,051, down 5.08% from 24 hours ago. Bitcoin continued its downward trend and gave up the $55,000 mark.
The reason why Bitcoin is plummeting is because of Jerome Powell, chairman of the U.S. Federal Reserve. On his speech, Powell stated that Bitcoin is not appropriate as a means of storing value. And added that the fed will delay the introduction of cryptocurrency as much as possible. Bitcoin started to decline shortly after Powell’s remarks.
Powell: Bitcoin is highly volatile
Fed Chairman Powell said at a conference on digital banking hosted by the Bank for International Settlements (BIS) on the 22nd (local time). “We will slowly introduce cryptocurrency that is not appropriate as a means of storing value.”
Powell defined cryptocurrency as “highly volatile — see Bitcoin — and therefore not really useful as a store of value. They’re not backed by anything. They’re more of an asset for speculation”.
He evaluated that cryptocurrency is “essentially a substitute for gold rather than the dollar”. Powell then predicted that it would take considerable time for the Fed to issue and develop digital currencies.
Powell also stated that stable coin itself is “an improvement from the crypto asset. However its credibility still came from the support of sovereign currency.
“Stable coins may have a role to play with appropriate regulation, but that role will not be to form the basis of a new global monetary system,” the Fed chair said. “A global currency governed by the incentives of a private company is something that will deserve and will receive the highest level of regulatory expectations”.
On the other hand, Powell predicted that even though China is speeding up the introduction of its own digital currency, the “digital yuan,” it will take a considerable amount of time to develop and issue the “digital dollar.” The transition to digital currency requires the needs and permission of Congress, the administration, and the wide public, Powell said. “We will approach it very carefully and transparently.”