Bitcoin Price Surge Seen as Federal Reserve Chairman Backs Crypto

Bitcoin Price Surge Seen as Federal Reserve Chairman Backs Crypto

By Benson Toti - min read
Updated 21 March 2023

A resurgent Bitcoin soared past $10,000 after the Fed Chair, Jerome Powell, backed digital cryptocurrency projects. His comments led to a Bitcoin price surge and has fuelled debate over the future of digital money.

The Bitcoin price surge was started by Powell's comments

March 2018 FOMC Press Conference: DSC_05” (Public Domain) by Federalreserve

What He Said

Jerome Powell was providing testimony to the House Financial Services Committee. While talking about the American economy and its monetary policy, he spoke about the need for private crypto transactions.

What he said was that a transparent ledger where everyone’s payments can be seen would not be particularly attractive in the US.

He was asked by Congressman Bill Foster about what is being done to keep up with China’s bold blockchain plans. This question was based on the fear that the US Dollar could lose its status as the planet’s most powerful reserve currency.

Powell confirmed that the Fed currently has a “lot of projects” that they are working on.
While no exact details were given, it is clear that there is a lot of effort being made in the US to avoid falling behind China.

He also pointed out that quick progress is needed on blockchain development. It seems that the arrival of Facebook Libra could be one of the game-changers that has forced monetary bosses to look at this issue more urgently.

Previously, Powell had compared BTC to a store of gold. However, this is the first serious indication that the Fed is looking at producing its own crypto tokens.

What Was the Reaction Like?

There was an immediate reaction on social media. Bullish sentiment came to the fore, with many BTC advocates celebrating the news of Powell’s comments.

The Bitcoin price surge then began. The leading digital currency passed $10,000 as it rose by 4%. At one point, it rose $500 in under six hours. At the time of writing, the price sits at just over $10,200.

Altcoins such as Ethereum (ETH) and Litecoin (LTC) also made significant gains, as the entire crypto market made positive moves. The fact that online searches for cryptocurrencies have risen sharply suggests that more fiat money could be moving in to the market.

What to Expect Now

It still isn’t clear whether a crypto USD could be part of the future. However, the fact that such an important figure in the financial world has acknowledged the importance of digital money is big news.

The current Bitcoin price surge is a continuation of the excellent start it has made to 2020. Time will tell whether it reaches the ambitious price predictions set by some analysts.