Bitcoin news today, Jerome Powell confirmed the Federal Reserve cannot hold Bitcoin, leaving the decision to Congress.
Federal Reserve Chair Jerome Powell stated on Wednesday that the U.S. central bank does not intend to participate in any government initiatives to accumulate significant quantities of bitcoin. "We're not allowed to own bitcoin," Powell remarked during a press conference after the Fed's recent two-day policy meeting, where officials lowered interest rates as anticipated but indicated a more uncertain outlook for monetary policy in the coming months.
Bitcoin price forecast hinges on market sentiment, regulatory developments, and economic indicators, suggesting potential volatility amid ongoing institutional interest and technological advancements. Regarding the legal issues surrounding bitcoin ownership, Powell stated, "That's something for Congress to consider, but we are not seeking a law change at the Fed." He was responding to the possibility of the central bank engaging in discussions about the government establishing a Strategic Bitcoin Reserve following President-elect Donald Trump's inauguration. Powell's remarks negatively impacted bitcoin's value, which had surged, along with other cryptocurrencies, since Trump’s victory on November 5, amid expectations of a more lenient government stance on assets that are primarily used for speculation rather than as actual currency.
Trump has proposed the idea of establishing a U.S. bitcoin strategic reserve. However, the incoming president has not elaborated on what this reserve would involve, other than suggesting that its initial assets might include bitcoin confiscated from criminals, estimated to be around 200,000 tokens worth approximately $21 billion at current market rates. This year, bitcoin's value has more than doubled, exceeding $100,000, driven by optimism surrounding Trump's pro-crypto policies. Despite this surge, analysts note that bitcoin’s volatility over its 15-year history diminishes its effectiveness as a store of value or a medium of exchange, which are essential characteristics of a reserve currency.
Republican Senator Cynthia Lummis has proposed legislation to establish a strategic bitcoin reserve, wherein the U.S. Treasury would acquire 200,000 bitcoins each year until the total reaches one million tokens. The funding for these purchases would come from Federal Reserve bank deposits and gold reserves.
According to a recent analysis by Barclays, creating such a reserve would likely necessitate Congressional approval and the issuance of new Treasury debt. The analysts noted that, considering the potential methods for establishing the reserve, "we suspect such a plan would encounter significant opposition from the Fed."
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