Federal Reserve Chairman Jerome Powell testifies during a House Financial Services Committee hearing on

The Federal Reserve Chairman, Jerome Powell, just said that bitcoin is a “speculative store of value” like how gold is used.
It’s a win for proponents of the theory that the US trade war has spurred investors to buy bitcoin as a way to diversify their portfolios.
Trump yesterday slammed bitcoin and other crypto currencies, saying they should be “subject to all banking regulations.”
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Federal Reserve Chairman Jerome Powell waded into the debate about bitcoin’s role in the global financial system, adding weight to the theory that it’s a safe haven option for investors.

When answering questions before the senate banking committee on Thursday, Powell was asked: “If a cryptocurrency system became prevalent throughout the globe, would that diminish or remove the need for a reserve currency?”

Powell replied: “Things like that are possible, but we really haven’t seen them, we haven’t seen widespread adoption. Bitcoin is a good example. Really almost no one uses bitcoin for payments, they use it as an alternative to gold, it’s a store of value, a speculative store of value, like gold.”

It’s a win for proponents of the theory that the US trade war with China and disputes with Iran, Mexico, Germany, and other countries have spurred investors to buy bitcoin as a way to diversify their portfolios.

Read more: 5 theories behind bitcoin’s dizzying rally above $12,000

“As the geopolitical situation remains so uncertain, strategic investors are still looking at bitcoin and ethereum as uncorrelated with centralized assets, so they provide a quasi safe-haven option.” said Marcus Swanepoel, CEO of Luno, a cryptocurrency platform.

Some have poured water on that theory: A recent study found cryptocurrencies are vulnerable to the same market forces as conventional assets.

Powell added on Thursday: “People have been talking about this [removing a …read more

Source:: Business Insider

      

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