Fed Cannot Maintain Bitcoin, No Plans But To Change Legislation, Powell Says

Jerome Powell, chair of the US Federal Reserve, not too long ago dismissed speculations that the Fed could add Bitcoin to its reserves. On the finish of the its two-day assembly, Powell said that the Fed isn’t allowed to personal Bitcoin and doesn’t need to become involved in any authorities initiative to create a stockpile of digital property. 

The Bitcoin announcement comes after the Fed introduced charge cuts whereas signaling unsure financial insurance policies within the subsequent few months. Powell’s announcement was stunning when President Donald Trump introduced key appointments of crypto-friendly personalities. The market instantly reacted to Powell’s assertion, sending Bitcoin’s worth down by 5.7%. Different high altcoins like XRP additionally shed worth.

Powell Thumbs Down Plans To Add BTC To Reserves

The debates on whether or not it’s time to create a stockpile of Bitcoin gained traction after Donald Trump secured a win and one other presidency. Trump used Bitcoin and crypto as a part of his marketing campaign to draw assist from crypto personalities and commentators. And by appointing key crypto-friendly personalities to high authorities positions and promising to revamp the SEC management, many count on to foretell a Bitcoin stockpile quickly.

Powell says Fed can’t maintain Bitcoin, not searching for to vary that https://t.co/72RQGK1Q6K

— ST Enterprise Desk (@stbusinessdesk) December 18, 2024

Nonetheless, Powell has categorically said that the US banking system can’t maintain Bitcoin. He argued that based on the Federal Reserve Act, there are guidelines on what banks can personal, and Bitcoin will not be included within the checklist.

He introduced that they’re not trying to change the regulation quickly, and it’s as much as Congress to resolve. 

Curiosity In Bitcoin Strategic Reserve Continues To Develop

Regardless of the Fed chair’s opinion on Bitcoin as a reserve asset, there was rising consideration on Bitcoin as a possible reserve asset. Through the elections, Trump supported the proposal and even instructed that the US ought to grow to be the middle for crypto developments. Different pro-Bitcoin policymakers, like Wyoming Senator Cynthia Lummis, have been campaigning for Bitcoin to be thought of a reserve. `

Early this yr, Lummis filed a invoice asking the US Treasury to purchase and add Bitcoin to the reserve. Beneath the Lummis invoice, the US Treasury will undertake a program to purchase 20,000 BTC yearly for 5 years till the reserve holds 1 million tokens.

BTC worth down within the final 24 hours. Supply: Coingecko 

Bitcoin’s Worth Drops After Powell Assertion

The market reacted negatively to Powell’s assertion, with Bitcoin’s worth dropping to $100,300, down by roughly 5.7% in comparison with the day gone by’s shut. As of press time, Bitcoin’s 24-hour buying and selling worth is between $98,839 and $105,306.

Different high cryptos adopted Bitcoin’s lead, with Ethereum dropping by 6.8%, Solana by 8.1%, and Binance Coin shedding 4.6% in worth. Dogecoin was the worst performer among the many high altcoins, dropping to $0.348, or an 11% loss. Additionally, the inventory market tumbled after the Fed official’s assertion. The Nasdaq 100 dipped by 2%, and S&P ended the buying and selling day with a 1.55% loss.

Featured picture from Pexels, chart from TradingView