Bitcoin faced renewed pressure after Federal Reserve Chair Jerome Powell clarified that the central bank is “not allowed” to own cryptocurrencies. The statement, made during a congressional hearing, reignited concerns about regulatory stances on digital assets. Powell underscored the legal constraints on the Fed’s participation in crypto markets, which he described as highly speculative. Bitcoin prices fell nearly 2% to hover around $26,500, reflecting market sensitivity to his remarks.
Powell’s comments come as lawmakers debate the evolving role of digital currencies in the financial system. While some see Bitcoin as a hedge against inflation and an alternative asset, Powell emphasized that crypto lacks intrinsic value and does not align with the Fed’s mandate. His remarks were consistent with past statements cautioning against viewing Bitcoin as a stable store of value.
This dip follows a series of volatile weeks for the cryptocurrency market, as investors navigate mixed regulatory signals. With the Fed remaining firm on its position, Bitcoin enthusiasts face increasing uncertainty over institutional adoption. Analysts suggest that Powell’s statement could further cool institutional interest in cryptocurrencies, dampening short-term sentiment.
Bitcoin’s price volatility highlights broader concerns over crypto’s future amid regulatory scrutiny. The Fed’s stance, combined with global moves to tighten oversight, may limit the adoption of digital assets in traditional financial systems. For now, Bitcoin’s path forward remains tied to how regulators and institutions reconcile innovation with stability.
