‘Bitcoin is not a Competitor for the Dollar, it’s a Competitor for Gold’ is the Desperate Psyop of a Ponzi Operation-Gold is the Real Competitor to the Dollar

Image Credit: MarketWatch

By Stan Szymanski

At yesterday’s New York Times DealBook Summit, Fed Chair Jerome Powell was asked by Andrew Ross Sorkin: ‘How does Crypto sit with you right now? ..At a time it appears that this next administration may legalize it in a much more broader way (it is legal now) that there might be a much more bigger groundswell for it?’

The essence of Powell’s answer was encapsulated in this snipet:

…’People are not using it as a form of payment or as a store of value. It’s highly volatile. It’s not a competitor for the dollar. It’s really a competitor for gold.‘…(Cointelegraph 12/5/24)

Powell is wrong on multiple claims in his short statement.

First, people can and do pay for things with Bitcoin (and other crypto). For example, some gold and silver bullion dealers take cryptocurrency as a form of payment for precious metals purchases. Alex Jones takes donations in Bitcoin.

So Powell starts off being full of baloney.

Secondly, people are using it as a store of value. The people that bought at $10,000 and now hold it when the price as I write is over $100,000 certainly have more as far as it is valued in US Dollars. Will it be this way going forward? It certainly is a tenuous store of value in my opinion.

Being that Bitcoin is only 15 years old I think it is still good to look at this asset as one looked at the ‘Nifty Fifty’ stocks of the late 1960’s and early 1970’s. Some of the stocks in the 50 were and still are viable household names such as GE, Coca Cola and IBM. However names like Xerox and Polaroid stumbled and did not make into the modern era even though the GUI (Graphical User Interface) that we all see every day o our Mac’s and PC’s was a product of Xerox Park research…and I can still buy an ‘instant’ camera for my niece at Christmas time. How will Bitcoin fare 50 years later like our review of the ‘Nifty Fifty’? Time will tell.

Will Bitcoin ever be used widely for transactions? BTC is not nearly as cost effective or fast as other cryptocurrencies. For instance Bitcoin Cash (BCH) is reported around be more than 28 times faster than Bitcoin. If crypto is ever truly adopted in a widespread manner IMHO it will not be Bitcoin-it will be some other crypto or CBDC (Central Bank Digital Currency) that will be used to handle vast amounts of transactions.

Powell was right to say the BTC is volatile. No one can dispute that. And as I have reported previously -The ‘StableCoin’ Tether is allegedly (and dubiously) involved in the recuperation of Bitcoin ascent upward after a fall in price. This vulnerability is something that should rightfully concern everyone-especially those in the incoming administration who are pushing for BTC to be part of a U.S. ‘Strategic Reserve’.

So IMHO, Powell is right that Bitcoin is not a competitor to the U.S. Dollar. There can only be a maximum of 21 million BTC ‘minted’ or ‘mined’, therefore if Bitcoin were our money supply, it could never expand.

And an even bigger deal is that commercial banks do not accept BTC as collateral for loans. Yes, there are crypto lenders like SALT Lending-but generally with crypto lenders-if you want a loan for $100k for instance, you have to put up $200k in BTC and then you are subject to what amounts to margin requirements because of the volatility of Bitcoin.

So when you put together the facts that the banking system frowns on Bitcoin lending and that Bitcoin itself cannot be hypothecated (there can only be 21 million BTC in existence when all BTC are mined) you have the unfortunate fact that while Bitcoin may be an asset-it can -never- be used as a currency.

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