Some crypto market participants believe it’s the remarks by Federal Reserve (Fed) Chairman Jerome Powell on China’s digital fiat that sent bitcoin (BTC) to 5-month highs yesterday. However, his comments on the world’s largest economy might leave the market with a mixed feeling.
The remarks made before the U.S. House Financial Services Committee regarding U.S. work on a digital currency and privacy issues gave hope to Bitcoin faithful that the government was moving toward adoption.
Of particular note, Powell told representatives that, "A LEDGER where you know everybody's payments is not something that would be particularly attractive in the context of the U.S.” He then stated that such anti-privacy measures might work in China, but not in the U.S. democratic climate.
The Cryptoverse erupted with commentary, as many of the Bitcoin early adopters came out in favor of the comments, suggesting substantial upside. For example, Anthony Pompliano, Co-founder of Morgan Creek Digital said, simply, “Game on.”
BREAKING: Fed Chairman Jerome Powell just came out in favor of private transactions for digital currencies.
— Pomp ?? (@APompliano)
Long term concerns
However, in spite of speculations about potential growth in BTC, should the U.S. government move toward greater adoption openness, Powell’s remarks have also sent a mixed message.
He made it clear that the economy is currently in a “very good place” and has remained “resilient” to numerous recent punches. Also, Powell estimates that the economic growth will remain solid, while his concerns for the economy are more long term.
However, he stressed that after three consecutive rate cuts last year, the Fed is running out of tools to stave off recession, should it occur. Additionally, with the ever-burgeoning national debt, which is expected to top USD 1 trillion this year, little remains to protect the economy from the next major recessionary cycle.
