Crypto Can not Replace Gold, Fed President Mary Daly Says

- San Francisco Fed President Mary Daly stated that cryptocurrency is a multi-functional asset with broader applications than gold - Federal Reserve Chair Jerome Powell pointed out the volatility of Bitcoin and its limitations as a means of payment [Unblock Media] In this analysis, we will explore the correlations and distinctions between cryptocurrencies and gold. Mary Daly, President of the Federal Reserve Bank of San Francisco, argued that cryptocurrencies should be considered an independent asset class because their range of applications is much broader than merely replacing gold. She explained that cryptocurrencies can serve various roles, including currency, a means of transaction, and a store of value, making their characteristics different from those of a single asset like gold. On the other hand, Federal Reserve Chairman Jerome Powell pointed out that Bitcoin is highly volatile and has not yet fulfilled its roles as a payment method or a store of value. Powell noted that Bitcoin could fluctuate by thousands of dollars in a single day, which does not provide stability of value. Such volatility could cause instability in prices if used as a means of payment. As of the end of this year, the price of Bitcoin has risen by 106% compared to the beginning of the year. Bitcoin has shown record growth since Donald Trump's election, surpassing $100,000 for the first time on December 4. Additionally, stocks related to cryptocurrencies are also performing well. The rise in Bitcoin's price is increasing investor interest in cryptocurrencies, boosting the demand for stocks related to cryptocurrency exchanges. The rising stock prices of Coinbase and Robinhood reflect this market sentiment. Many traditional investors are showing increased interest in cryptocurrencies. For instance, Wisconsin's pension fund has invested over $1.6 billion in Bitcoin, and MicroStrategy is aggressively purchasing Bitcoin as well. The new administration has appointed venture capitalist David Sacks as the 'Crypto Czar' to oversee cryptocurrency issues. These moves suggest that the U.S. is pursuing various policies related to cryptocurrencies, aiming to strengthen its leadership position. Lastly, Mark Palmer, an analyst at the Benchmark Company, forecasts that Bitcoin's price will reach $225,000 by the end of 2026. Such predictions are driven by growing interest from institutional investors in Bitcoin. Through this analysis, one can understand the differences between cryptocurrencies and traditional assets, current market sentiment, and future outlook.