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Takes


FED CHAIR JEROME POWELL IS CORRECT: BITCOIN IS IN COMPETITION WITH GOLD, NOT THE
DOLLAR

Powell said bitcoin is digital gold.
 * Author:
   Nikolaus Hoffman
 * Publish date:
   Dec 4, 2024



Powell said bitcoin is digital gold.

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Follow Nikolaus On 𝕏 Here For Daily Posts

Today, the Chairman of the Federal Reserve, Jerome Powell, said in an exclusive
interview with CNBC that Bitcoin is in competition with gold, not the U.S.
dollar.




“People use bitcoin as a speculative asset — it’s like gold,” Powell said.

“It’s just like gold, only it’s virtual, it’s digital. People are not using it
as a form of payment or as a store of value. It’s highly volatile. It's not a
competitor for the dollar, it's really a competitor for gold,” he added.

While it sounds like he may have stumbled on his own words, saying no one uses
bitcoin as a store of value when that is literally one of its most prominent use
cases for it today, I agree with his overall position.





As an American living in America, I do not feel that BTC is in competition with
the U.S. dollar today. Myself, along with many other Bitcoiners I know, are
trying to stockpile as much bitcoin as we can, using it as a store of value.
When I do spend bitcoin, which I do every weekend when I buy beef at the farmers
market) it’s not the bitcoin from my long term savings that I’m spending. I’m
taking dollars from my bank account, buying bitcoin on Cash App, and directly
sending that bitcoin to the farmer using the Lightning Network. I feel like I’m
basically spending the dollars in my bank rather than bitcoin that I hoard.



I prefer to spend my dollars, a depreciating asset, and save in bitcoin, an
appreciating asset. Because BTC is not widely accepted where I live, I need
dollars in my daily life. I am also incentivized to spend my dollars instead
because I can earn more bitcoin too by using bitcoin-back rewards apps like Fold
and Lolli.

I also prefer to store my wealth in bitcoin as compared to gold. I don’t need
gold, as I can’t spend it anywhere, and while it maintains value vs 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 price appreciation, why would I choose to
hold a loser when I know the winner is going to continue to outperform it?

I would predict that the overwhelming majority of Americans would choose the
dollar over bitcoin today when it comes to a medium 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's, I believe bitcoin will continue
to be seen as superior to gold. Whether Powell is aware of all of Bitcoin's
properties, he's right that bitcoin is strongly viewed much more like a digital
form of gold than a new monetary mechanism for payments in the United States.






This article is a Take. Opinions expressed are entirely the author's and do not
necessarily reflect those of BTC Inc or Bitcoin Magazine.


Tags
terms:
jerome powellDollarsGoldBitcoinFed
By
Nikolaus Hoffman
Follow nikcantmine
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