It may be too early to say that Bitcoin has finally succeeded due to its highly volatile market price.
However, when people such as the U.S Federal Reserve Chairman, Jesse Powell begins to speak favorably about the cryptocurrency’s potential of becoming an alternative to gold, then it is worth paying attention.
In Powell’s testimony before the U.S Senate Banking Committee on Thursday, the Fed Chairman who was originally speaking about Facebook’s Libra project was queried on whether the rise of a cryptocurrency system that is prevalent throughout the globe could diminish or remove the need for a reserve currency.
“In the traditional sense, things like that are possible, but we really haven’t seen them, we haven’t seen widespread adoption.”
Speaking about Bitcoin, he said, “it’s a good example, really no one uses Bitcoin for payments. They use it more as an alternative to gold. It’s a store of value; it’s a speculative store of value like gold.”
“People have been talking about this since cryptocurrency emerged, but we haven’t seen it. But that’s not to say we won’t see it. And if we do see it, yes you could see a return to an era in the United States where he had so many currencies — in the national banking era.”
There is no doubt that Powell’s comment could not have held some much power if it came from any other person other than the head of the global reserve currency, the U.S Dollar.
In this regard, any Bitcoin enthusiast would likely regard those words as the perfect validation of Bitcoin as being the digital version of gold. Gold at the moment a $7+ trillion asset with 5,000+ years of history and while Bitcoin is still a $200 billion asset with just ten years of history.
That those not detract from the fact the newer gold has a highly volatile market value, but still retains the possibility of replacing the former (Gold 1.0) or at least share a large percentage of its market cap.