Just as the crypto industry started gaining traction, officials from across the globe seem to have been looking into these digital assets, particularly Bitcoin [BTC]. The rise in the price of Bitcoin led to an array of speculations of the king coin soon replacing the dollar. However, the Chairman of the Federal Reserve of the United States, Jerome Powell, recently addressed this and suggested that Bitcoin could be a substitute for gold as opposed to the dollar as cryptocurrencies aren’t “backed by anything.”
More recently, appearing in a recent Squawk Box interview by CNBC, the United States’ former comptroller of the currency, Brian Brooks suggested otherwise. He stressed how crypto, specifically Bitcoin had backing whereas the US Dollar did not.
Crypto Over The Dollar
Bitcoin has been time and again been touted as digital gold considering the characteristics that both BTC as well as gold hoard. Store of value is a widely familiar aspect. However, Powell in his recent statements delivered a rather dubious assertion. Speaking about the same, the host of Squawk Box, Kernen said, “He just said it’s like gold but not a store of value. Does he not think that gold is a store of value?”
The Bitcoin market witnessed the arrival of several newbies throughout the last couple of months. The rise in its price lured an array of people into the market. Brooks elaborating on the same suggested that the dollar was about 40% less of a good store of value asset than it was over a year ago. This could have been a reason why people flocked into the crypto market, he added.
Additionally, Brooks said,
“The point I really wanna make is the dollar may not actually be backed by anything […] But cryptocurrencies actually are backed by something. They’re backed by underlying networks, and what you’re buying when you buy a crypto token — whatever it is Bitcoin or anything else — you’re buying a piece of a financial network built to transact all kinds of stuff.”