'We're Not Allowed to Own Bitcoin': Crypto Price Drops After U.S. Federal Reserve Head Makes Surprising Statement Fed Chair Jerome Powell's comments on Bitcoin and rate cuts have rattled cryptocurrency investors.
By David James
Federal Reserve Chairman Jerome Powell took a bite out of Bitcoin's historic price surge.
In a press conference on Wednesday, he said the central bank is not currently looking to build a reserve of Bitcoin, and projected only two rate cuts for 2025.
"We're not allowed to own Bitcoin. The Federal Reserve Act says what we can own, and we're not looking for a law change," Powell said. "That's the kind of thing for Congress to consider, but we are not looking for a law change at the Fed."
Bitcoin prices fell more than 5% following the press conference. As of this morning, the value sits at around $95,000. On Tuesday, it hit $108,000.
Related: An International Perspective on Bitcoin's Value Surge
Holding Bitcoin was floated by President-elect Donald Trump as a way to stay ahead of the competition, per USA Today.
Prior to the 2024 election, Trump spoke at a Bitcoin convention and said that he intends to make the United States the "crypto capital of the planet and the bitcoin superpower of the world." The Trump family rolled out a new cryptocurrency business in September and, this month, he named former PayPal executive David Sacks as his "White House A.I. & Crypto Czar."
The announcement from Powell didn't just affect Bitcoin. Coindesk reports that Ethereum's ether (ETH) dropped 10.8% and Dogecoin's DOGE took a 15%-20% loss. "Over the past 24 hours — roughly since yesterday's rate decision by Fed policymakers — nearly $1.2 billion worth of leveraged crypto derivatives trading positions have been liquidated across all assets," writes Krisztian Sandor.
