Fed's Bullard Recognizes Bitcoin as Rival to Gold

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Tue, 02/16/2021 - 14:08
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Alex Dovbnya
James Bullard, the president of the Federal Reserve Bank of St. Louis, is certain that Bitcoin is competing with gold, not the U.S. Dollar
Fed's Bullard Recognizes Bitcoin as Rival to Gold
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On Tuesday's broadcast of CNBC's "Squawk Box," Federal Reserve Bank of St. Louis President James Bullard recognized Bitcoin as a rival to gold:

I'd categorize it as a rival to gold, and it's a good way to think about it.

At the same time, Bullard rejected the idea of Bitcoin competing with the U.S. Dollar since it is "very hard" for a private cryptocurrency to perform its role:

You don't want to go with a non-uniform currency when you walk into a Starbucks and maybe you'll pay with Ethereum, maybe you'll pay with Ripple, maybe you'll pay with Bitcoin, maybe you'll pay with a dollar. That isn't how we do this.

He also acknowledged that there is underlying currency competition, with investors flocking to traditional safe havens such as the Japanese yen.

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Tampering is not on the table

Despite predicting that the U.S. might see a "roaring" economy after the pandemic, Bullard made it clear that the Fed was not anywhere near dialing back its support.

He signaled that the central bank had no plans to reduce asset purchases (so-called "tampering"), which is believed to be a bullish sign for crypto.

Speaking of Bitcoin's ascent to $50,000, Bullard is convinced that, just like gold's volatility, Bitcoin's performance will not affect the Fed's monetary policy.

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About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

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