From "no one uses it" to "power as an asset class," it appears that Fed Chairman has changed his mind about cryptocurrencies like Bitcoin.
Testifying on the Monetary Policy Report on June 21, Federal Reserve Chairman Jerome Powell impressed the crypto community with his latest remarks. He said, "Crypto appears to have to staying power as an asset class."
Powell also noted that he considered stablecoin a form of money while emphasizing the role of the central bank as an "ultimate source of credibility in money" in "all advanced economies."
Fed Embraces the Digital-Asset Destiny
During the hearing, the primary focus revolved around monetary policy, with particular attention given to the Federal Reserve's recent decision to halt interest rate hikes.
Powell, in his statement, reiterated the central bank's intention to proceed with rate increases at a more gradual pace, stressing the importance of considering costs and proceeding with caution.
Highlighting the progress achieved thus far, Powell emphasized the need to assess the economic landscape and make thoughtful adjustments to improve overall conditions, albeit at a slower rate.
The Federal Open Market Committee (FOMC) recently opted to temporarily suspend any further increases in living costs, providing policymakers with an opportunity to analyze the state of the US economy thoroughly.
Another major highlight of the discussion was the developments of Central Bank Digital Currency (CBDC), reportedly associated with the FedNow program, an instant payment system founded by the Fed this year. The potential launch of a digital dollar has stirred many controversies among U.S. citizens.
In 2019, Powell expressed doubts about the possibility of crypto's widespread adoption, stating that almost no one used Bitcoin for payments. The Fed's stance toward the crypto landscape has remained skeptical for many years.
Just after the SEC's lawsuits against Binance and Coinbase broke out, over ten major players in the U.S. made public moves to join the crypto landscape. Now with the Fed's statement, it appears that regulatory figures have embraced the digital-asset destiny.
Bull Run Yet?
The entire crypto market skyrockets following Fed's statement. Previously, many suggested that a bull run might return after a series of Bitcoin ETF filings that renewed the optimism.
Bitcoin's price hovers around the $30,000 mark, creating an atmosphere of anticipation among cryptocurrency enthusiasts.
Similarly, Ethereum experienced a momentary breakthrough, surpassing the $1,900 mark before slightly retracting to $1,885. The day witnessed a price surge across various altcoins, with the memecoin $PEPE taking the spotlight, soaring over 15% within the last 24 hours.
Interestingly, the BTC/USDT pair on Binance.US exhibited a notable jump, reaching $138,000, a 4.75% increase compared to other exchanges. However, the price swiftly returned to its usual range.
This occurrence can be attributed to the relatively weak liquidity of the BTC/USDT pair, which recorded a modest 24-hour trading volume of only $14 million.
Binance's recent legal encounter with the U.S. Securities and Exchange Commission (SEC) has significantly impacted the liquidity of Binance.US, leading to a 76% decrease. The platform's global market share has plummeted to a mere 1%.
Turning our attention to Binance Coin ($BNB), it witnessed a surge above $255 earlier in the day. However, at the time of writing, its value has dipped slightly to $244. This price fluctuation could be attributed to Binance's recent countermove in response to the SEC's actions
Lawyers representing Binance.US, Binance Holdings Limited, and CEO Changpeng Zhao have filed a lawsuit against the SEC, alleging the dissemination of false information in recent lawsuits, potentially harming Binance US customers.
To substantiate their claims, the legal team provided a hearing transcript wherein the SEC admitted the lack of evidence regarding the dispersal of Binance US assets abroad.
There is no way to know where crypto regulation in the USA will end up, but with the central bank head talking about crypto power, some form of stronger regulation is likely on its way.
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