Fed Chair Powell Is No Fan Of Bitcoin; It’s Good For Money Laundering
(Kitco News) - Momentum in bitcoin is starting to shift as prices have bounced off June’s nearly one-year low; however, despite the positive price action, one person remains a critic of the cryptocurrency: Jerome Powell.
In the last four days, bitcoin has rallied more than 19% as prices push above $7,000 per token, its highest level since mid-June, according to aggregated price charts on Kitco.com.
During his testimony before the House Committee on Financial Services, the chairman of the Federal Reserve was asked for his opinion on cryptocurrencies and he had few kind words for the sector.
"Cryptocurrencies are great if you are trying to hide money or launder money,” said Powell during his testimony.
He added that he doesn’t see cryptocurrencies as a store of value and the sector poses a significant investment risk for investors.
He explained that investors just have to look at the price action over the past year to see the risk and volatility in the digital marketplace.
While bitcoin has bounced off last month’s lows, the price is still down almost 61% from its December highs.
A significant problem with cryptocurrencies, Powell said is that they do not have any intrinsic value. He added that it’s not even a reliable payment system as bitcoin are eventually sold for U.S. dollars.
In his final comment about the sector, Powell said that the Federal Reserve is not looking at creating a creating a digital currency.
Powell has generally been upbeat in his assessment of the U.S. economy and labor market in his semi-annual testimony before Congress. In his prepared remarks, he noted that in the current environment the Fed’s “best way forward,” is to continue to raise interest rates gradually.
In June the U.S. central bank signaled that it could raise interest rates two more times this year.