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Federal Reserve Chair Jerome Powell has declared Bitcoin a rival to gold, not the US Dollar, sparking fresh debates on its role as an inflation hedge. With institutional adoption surging and spot ETFs approved, Bitcoin is redefining its position in global markets.
Bitcoin Gains Recognition Over Gold, Says Fed Chair Powell
In an interview with Andrew Ross Sorkin of CNBC, the Fed Chair offered his thoughts on this comparison. His remarks are a direct response to those who advocate for Bitcoin and think it has the potential to replace the US dollar. According to Jerome Powell, Bitcoin's main rival is gold, not the US dollar. Hence, the currency shouldn't be tagged along with it.
The acknowledgement of Bitcoin as a distinct asset class has undergone a sea change with this declaration. The remark has sparked a discussion in the wider market over the implications for President-elect Trump's strategic Bitcoin reserve plan.
Bitcoin’s Evolution as a Deflationary Hedge
The function of Bitcoin has changed substantially within the last decade. The coin has evolved from its original purpose as an asset to support P2P payments into a strong deflationary hedge. This is crucial when comparing Bitcoin to gold since the latter has been a trustworthy medium of exchange for ages.
Among the many arguments advanced in favor of Bitcoin over gold is the cryptocurrency's rapid price increase. Bitcoin has surpassed it in terms of gains year-to-date (YTD), although both assets have recorded several ATHs so far this year.
Year-to-Date Performance: Bitcoin Versus Gold
The price of one bitcoin was $98,825.64 as of this writing, an increase of 3.24% over the past 24 hours. In comparison, the price of gold has increased by 0.34% to $2,649.08.
Even though it has been around for a long time and is still relevant, Robert Kiyosaki and many other institutional investors still recommend gold. Having said that, the number of large institutions purchasing Bitcoin has increased dramatically.
Institutional Adoption Pushes Bitcoin to New Heights
The digital currency's corporate adoption effort is being spearheaded by MicroStrategy. Business data and software company Coingape revealed earlier this week that it expanded its Bitcoin holdings to 402,100 units. This huge increase follows the company's purchase of 15,400 BTC for $1.5 billion.
Spot Bitcoin ETF products received approval earlier this year, following almost 20 years of gold ETF products becoming life. Wells Fargo and Susquehanna International Group, two well-known traditional investors, have BTC positions, and this product has been a big route for them.
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