Bitcoin Prices Dip as Powell Rules Out Federal Reserve

Federal Reserve Chair Jerome Powell has reaffirmed the central bank’s position on Bitcoin reserves, stating that U.S. laws prohibit the Federal Reserve from owning Bitcoin. Speaking at a post-Federal Open Market Committee (FOMC) conference following the announcement of a 25 basis point interest rate cut, Powell clarified that the Federal Reserve is not legally authorized to hold Bitcoin and has no intention of pursuing legal changes to facilitate a government-managed Bitcoin reserve.

Powell’s statements come amid growing discussions about Bitcoin’s role in the global financial system. Notably, his remarks gained attention because they follow recent developments in U.S. politics, including the election of Donald Trump as the nation’s 47th president. Trump’s administration has signaled interest in exploring a national strategic Bitcoin reserve, making Powell’s comments particularly relevant.

The Federal Reserve’s stance is consistent with Powell’s previous statements, where he has repeatedly dismissed the possibility of a Bitcoin reserve. His comments reiterate the central bank’s focus on its legal mandate and its reluctance to engage with Bitcoin as an asset class.

The timing of Powell’s remarks coincided with Bitcoin’s continued decline in price. Following the Fed’s announcement of a rate cut, Bitcoin experienced a drop of 2.1% within an hour, trading around $100,800 at the time of writing. Market analysts suggest that interest rate changes and regulatory uncertainty often impact Bitcoin prices, as investors weigh the implications for the broader economy.

While the Federal Reserve maintains its distance from Bitcoin, the broader U.S. financial landscape continues to engage with digital assets in various capacities. Trump’s proposed strategic Bitcoin reserve, though still in early stages, highlights the growing conversation around cryptocurrency’s role in national financial strategies. However, for now, Powell’s stance signals no immediate shift in the central bank’s approach.