By Michael Scott
The US Federal Reserve (Fed) head Jerome Powell refutes the argument that Bitcoin rivals the dollar. Instead, the Fed chair reiterates that BTC competes with gold.
Powell stated while addressing the New York Times DealBook Summit. He considers Bitcoin a speculative asset.
Bitcoin Rivals Gold as a Speculative Asset
The assets classified as speculative are sought by investors expecting the price to spike over time. Bitcoin fits in this class similarly to how investors readily speculate on gold prices. Powell profiles Bitcoin as the digital version of physical gold, hinting that individuals use both to fulfill the speculative purpose.
The Fed boss distances from the argument that Bitcoin rivals the US dollar. He explains that BTC usage has yet to occur in settling everyday payments and storing value. Nonetheless, he contends that Bitcoin is often highly volatile and thus comparable to gold.
Fed’s Role in Digital Assets
The Fed chair outlined the apex bank’s role as primarily monitoring the crypto interaction with the banking system. Despite this scrutiny, Powell admitted that the Fed does not directly regulate the crypto market.
Powell confirmed not owning any crypto, including Bitcoin. He explained that the decision not to own cryptos aligns perfectly with the commitment to ensure impartiality in the market.
Powell’s statement admitted that Bitcoin is attracting both retail and corporate investors’ attention. Most investors treat the world’s largest crypto as a means to hedge against inflation.
In contrast, Powell’s commentary considers Bitcoin speculative, whose nature closely aligns with gold and not the dollar. He added that the latter is commonly utilized in payments and savings.
Bitcoin Surpass $100,000
Despite the failed attempts to accomplish this target, Bitcoin has finally overcome resistance to surge beyond the $100K mark. This week, the premier crypto asset succeeded in setting its new all-time high at $103,900.
The daily chart shows it has retraced to exchange hands at $102,034, reflecting the modest intraday gains. The pioneering crypto has been 3% up in the past seven days, translating to a $1.968 trillion market value. Despite shielding its monthly gains at 33%, the daily volume has dipped by 24% to $99.876 billion per CoinGecko data.
Meanwhile, Bitcoin attracts scrutiny from market analysts, often issuing subsequent targets following the $100,000 milestone. Among them is market intelligence specialist IntoTheBlock, which gave a reasonable target guided by the historic cyclical performance.
The BTC surge to a six-figure level attained on Thursday elated the market speculators, who are now entertaining higher prices in their projections. With the bounce, speculators have called $150K, $250K, and even ambitious $1M as likely destinations.
The bullish sentiment is evident in the intelligence firm’s move to hint at possible expectations from Bitcoin after the $100K breach. Its recent insights saw the firm consider a realistic target in the $130K – 190K range.
Bitcoin Harbors Boundless Potential
IntoTheBlock acknowledges that Bitcoin has portrayed limitless potential, citing that the growing institutional adoption amid limited supply will guarantee the continued price upswing. The bullish outlook is guided by the previous performance in past upsurges.
The analysis demonstrates that BTC always realizes lower gain percentages in subsequent bull cycles. Notably, Bitcoin attained 594% in 202,1, a dismal gain relative to the 7,900% in 2013 and 2,560% in 2017.
IntoTheBlock infers the capital needed to sustain the upside momentum to spur Bitcoin price. The firm considers the $1M forecast in the current cycle to yield $19.7 trillion in market value, thus making it unreasonable.
The firm cites the diminishing returns portrayed on the Bitcoin cyclical performance to predict a 100-200% surge as a “reasonable expectation.” Consequently, IntoTheBlock illustrates that further gains would squarely fall within the $130,000- $190,000 range.
Exception Condition for Bitcoin Supernormal Surge
IntoTheBlock observes that Bitcoin could still push beyond the predicted upper limit in the event of a bullish occurrence. Per the recent analysis, the move by the Donald Trump-led administration to create a US Bitcoin reserve could fuel a massive leap past the $190K prediction.
The discussion on strategic reserve for BTC features in the pro-crypto agenda. Trump’s pronouncement aligns with Senator Cynthia Lummis, who teased its viability while addressing the Nashville Bitcoin conference in July.
Trumphhass has yet to issue any related comments since his victory. Nonetheless, Lummis still incessantly fronts the idea that the proposed bill would come to fruition.