Fed Chair Dismisses Idea of US Bitcoin Reserve

Jerome Powell, Chairman of the Federal Reserve, indicated that the institution is not interested in establishing a national bitcoin reserve. Following the statement, the cryptocurrency’s price barely held the $100,000 level.

On December 18, the Federal Reserve announced a reduction in the key interest rate by 25 basis points, bringing it to 4.25-4.5% per annum.

At the subsequent press conference, Neil Irwin from Axios asked Powell if he saw “any value or benefit” in the government creating a strategic reserve in the leading cryptocurrency.

“As you know, we are not allowed to own bitcoin. The Federal Reserve Bank dictates what we can own, and we are not seeking changes in legislation. This is for Congress to decide, but we are not interested,” Powell said.

The price of digital gold declined following the Fed meeting. In the early hours of December 19, quotes fell below the psychological mark of $100,000. On Binance, the minimum was $98,802.

At the time of writing, the rate had recovered to around $101,000.

On December 12, in an interview with CNBC, US President-elect Donald Trump confirmed the idea expressed during the election campaign of creating a national bitcoin reserve. Speculation arose that he would sign the corresponding order immediately after the inauguration on January 20. CEO of Satoshi Action Fund, Dennis Porter, even described a mechanism that would allow the government to fund the initiative without legislative changes by Congress.

Investor optimism related to this could have been one of the drivers of bitcoin’s local rally to new highs above $108,000.

The idea of a bitcoin reserve not only finds support, including at the state level, but also faces criticism.

Former BitMEX CEO Arthur Hayes doubted the Trump administration’s implementation of the initiative. According to the expert, the new government’s actual policy in January will disappoint investors, and cryptocurrencies face a “painful collapse.”

Real Vision’s Chief Analyst Jamie Coates also predicted a correction in bitcoin in the next two to three months.

Technical analyst Ali Martinez noted that the digital gold price broke out of a “Head and Shoulders” pattern. To invalidate the “bearish thesis,” the cryptocurrency needs to return to levels above $105,400, the expert noted.

#Bitcoin $BTC appears to have broken out of a head-and-shoulders pattern, projecting a target of $99,000! #BTC must to break past $105,400 to invalidate the bearish thesis. pic.twitter.com/xpJZIaqRO9

— Ali (@ali_charts) December 18, 2024

Ideas about creating bitcoin reserves have also been discussed in the Russian State Duma and the European Parliament.