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.
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.