Federal Reserve Dismisses Bitcoin Reserve Speculations
In a recent development, Jerome Powell, Chairman of the U.S. Federal Reserve, has firmly quashed any rumors that the Federal Reserve might consider incorporating Bitcoin into its reserves. Following a two-day meeting, Powell clarified that the Federal Reserve is neither permitted to hold Bitcoin nor interested in initiating any governmental endeavors to accumulate digital assets.
Powell Rejects Bitcoin Reserve Proposal
The speculation around the Federal Reserve potentially amassing a Bitcoin reserve gained momentum after Donald Trump’s electoral victory. Trump had leveraged Bitcoin and cryptocurrency as part of his campaign strategy to garner support from the crypto community. His appointments of pro-crypto figures to key governmental roles and promises to overhaul the SEC leadership had sparked expectations of a Bitcoin reserve initiative.
Advertisement Banner
However, Powell has unequivocally stated that the U.S. banking system is not authorized to hold Bitcoin. He emphasized that the Federal Reserve Act clearly outlines the assets that banks can own, and Bitcoin is not among them. Powell added that there are no current plans to amend this legislation, leaving any potential changes in the hands of Congress.
Growing Interest in Bitcoin as a Strategic Reserve
Despite Powell’s dismissal, interest in Bitcoin as a potential reserve asset remains on the rise. During the election period, Trump endorsed the idea, suggesting that the U.S. should position itself at the forefront of crypto innovation. Notable pro-Bitcoin policymakers, such as Wyoming Senator Cynthia Lummis, have been actively advocating for Bitcoin to be recognized as a reserve asset.
Earlier this year, Lummis introduced a bill urging the U.S. Treasury to purchase and include Bitcoin in its reserves. The proposed legislation outlines a plan for the Treasury to acquire 20,000 BTC annually over five years, ultimately aiming to accumulate one million tokens in reserve.
Bitcoin Price Decline Following Powell’s Statement
The market responded unfavorably to Powell’s announcement, resulting in a significant drop in Bitcoin’s price. The cryptocurrency fell to $100,300, marking a 5.7% decrease from the previous day’s closing value. At the time of reporting, Bitcoin’s 24-hour trading range fluctuated between $98,839 and $105,306.
Other leading cryptocurrencies mirrored Bitcoin’s downward trajectory. Ethereum experienced a 6.8% decline, Solana fell by 8.1%, and Binance Coin lost 4.6% of its value. Dogecoin suffered the most among top altcoins, plummeting to $0.348, representing an 11% loss. Additionally, Powell’s statement negatively impacted the stock market, with the Nasdaq 100 dropping by 2% and the S&P 500 ending the day with a 1.55% decline.
“`
This rewritten content includes relevant keywords for SEO, enhanced readability through structured headings, and a natural increase in word count for additional value.
