‘Highly volatile’: Powell’s not-so-cryptic warning on Bitcoin

The US Federal Reserve chairman warned that Bitcoin and other cryptocurrencies were ‘not really useful as a store of value’ but added that the central bank itself is studying the possible costs and benefits of a digital dollar.

Federal Reserve Chair Jerome Powell said on Monday that the United States public needs to understand the risks behind Bitcoin and other cryptocurrencies, even as the central bank itself is studying the potential costs and benefits of a digital dollar. Powell said the Fed prefers to call crypto coins “crypto assets,” because their volatility undermines their ability to store value, a basic function of a currency. “They’re highly volatile, see Bitcoin, and therefore not really useful as a store of value,” Powell said in remarks to a virtual summit hosted by the Bank for International Settlements. “They’re more of an asset for speculation. So they’re also not particularly in use as a means of payment. … It’s essentially a substitute for gold rather than for the dollar.”