Updated on:12/21/2025 04:31 PM 
The Federal Reserve Chairman Jerome Powell recently provided insights into his perspective on Bitcoin during a high-profile appearance at The New York Times DealBook Summit in Manhattan. Rather than viewing the leading cryptocurrency as a potential competitor to the U.S. dollar, Powell characterized Bitcoin as a speculative digital asset with characteristics similar to those of traditional gold.
During his address, Powell emphasized the inherent volatility of Bitcoin, highlighting how this characteristic limits its practical utility as a reliable form of payment or stable store of value. The Federal Reserve official's comments come at a time when the cryptocurrency market continues to evolve and gain increasing attention from traditional financial institutions worldwide.
According to Powell's assessment, Bitcoin currently occupies a unique niche in the global financial landscape. The cryptocurrency has recently achieved a market capitalization of approximately $1.92 trillion, positioning it as the world's eighth most valuable asset class. This milestone represents a significant achievement, as Bitcoin has now surpassed silver, which is valued at approximately $1.75 trillion. However, when compared to the traditional precious metal gold, which commands an estimated market value of $18 trillion, Bitcoin still represents a fraction of the established asset's market presence.
It's worth noting that this isn't the first instance of Powell drawing parallels between Bitcoin and gold. In 2021, the Federal Reserve chair made similar observations, stating that cryptocurrencies generally lack the stability required to serve as effective stores of value due to their price fluctuations. At that time, Powell specifically described Bitcoin as "essentially a substitute for gold, rather than for the dollar."
The current administration under President Joe Biden has faced criticism regarding its approach to cryptocurrency regulation. Some industry participants have accused the Federal Reserve of playing a pivotal role in what has been termed "Operation Chokepoint 2.0," an alleged initiative aimed at constraining the growth and development of the American cryptocurrency sector.
This controversy gained additional traction in August when the Federal Reserve issued a mandate to crypto-friendly Customers Bank, recommending enhanced risk management protocols and stricter compliance measures. In response to this development, Tyler Winklevoss, co-founder of the cryptocurrency exchange Gemini, publicly stated that the initiative "is alive and well," suggesting ongoing regulatory pressure on the industry.
Despite the Federal Reserve's generally cautious stance toward Bitcoin and cryptocurrencies as investment assets, there appears to be a nuanced perspective emerging within the institution. Notably, Fed Governor Christopher J. Waller has recently expressed a more positive outlook on decentralized finance (DeFi) technologies.
During his appearance at the Vienna Macroeconomics Workshop on October 18, Waller presented an interesting perspective on the evolving financial landscape. While maintaining that traditional financial intermediaries continue to play fundamental roles in market operations, he acknowledged that DeFi applications incorporate technological innovations that could potentially enhance the efficiency of conventional financial instruments.
Waller specifically highlighted several technological components within the DeFi ecosystem that demonstrate particular promise. These include distributed ledger technology (DLT), the process of tokenization, and the implementation of smart contracts—all of which have the potential to significantly improve both the speed and accuracy of financial transactions across various asset classes.
Building on these observations, Waller further expanded on his views during The Clearing House Annual Conference in November 2024. At this event, he raised thought-provoking questions about the practical utility of central bank digital currencies (CBDCs), suggesting that these government-backed digital tokens may not necessarily represent an improvement for payment systems. The Fed governor specifically questioned whether existing payment infrastructure faces problems that CBDCs would be positioned to solve effectively.
