Bitcoin, a digital currency that has been making waves in the financial world, saw a dip in its price on Wednesday. This came after Federal Reserve Chairman Jerome Powell made some significant statements. Powell emphasized that the central bank is not interested in holding bitcoin and signaled a more cautious approach to rate cuts in 2025. He stated clearly, "We’re not allowed to own bitcoin. The Federal Reserve Act says what we can own, and we’re not looking for a law change. That’s the kind of thing for Congress to consider, but we are not looking for a law change at the Fed." These comments had an immediate impact on Bitcoin's price.

Bitcoin's Future Hangs in the Balance

Impact of Powell's Statements

1: Powell's remarks regarding the Fed's stance on bitcoin sent shockwaves through the cryptocurrency market. Investors, who had been closely watching the digital currency's performance, became cautious. The idea that the central bank, which holds significant influence over the financial system, was not inclined to embrace bitcoin led to a sell-off. Bitcoin prices fell more than 5% on Wednesday afternoon, erasing some of the gains it had made earlier in the week. 2: This drop in price also raised questions about the long-term viability of bitcoin. While some experts believe that cryptocurrencies like bitcoin have the potential to disrupt traditional financial systems, others remain skeptical. The Fed's stance adds another layer of uncertainty to an already volatile market. Investors now have to carefully consider the implications of Powell's words and how they might affect the future of bitcoin.

Bitcoin's Recent Surge and Trump's Influence

1: In recent months, bitcoin's value has soared, and one of the key factors behind this rise is the potential regulatory environment under President-elect Donald Trump. Trump's statements and actions have indicated a more welcoming attitude towards cryptocurrencies. In July, he said he would make the United States the "crypto capital of the planet and the bitcoin superpower of the world." This sentiment has given confidence to investors and contributed to the upward trend in bitcoin's price. 2: Additionally, Trump's involvement in the cryptocurrency space has had a direct impact. In September, he helped roll out a new cryptocurrency business with ties to his family, and earlier this month named former PayPal executive David Sacks as his "White House A.I. & Crypto Czar." These moves have further boosted the profile of cryptocurrencies and attracted more attention from investors. As of Wednesday afternoon, Bitcoin's price was above $101,000, up more than 125% from the start of the year. The cryptocurrency hit a record high above $108,000 earlier this week.