Jerome Powell Says Cannot Hold Bitcoin, Leading to Bitcoin Price Plunge

- Bitcoin price drops approximately 3.5% following comments by Federal Reserve Chairman Jerome Powell - Donald Trump plans to hold seized Bitcoin as a strategic investment asset [Unblock Media] The price of Bitcoin plunged sharply after Jerome Powell, Chairman of the Federal Reserve, expressed his stance on Bitcoin holdings. Powell made it clear that the Federal Reserve cannot own Bitcoin, stating that the Federal Reserve Act specifies the assets the Fed can hold, and Bitcoin is not included. This law allows the Fed to hold U.S. government securities, mortgage-backed securities, and other assets related to monetary policy operations. Before Powell's remarks, Bitcoin was trading at around $103,700. Within less than an hour, it had fallen to $100,241. According to Coindesk data, Bitcoin's price dropped by approximately 3.5% following Powell's statement, causing a rapid shift in short-term investment sentiment, which disappointed Bitcoin investors significantly. President-elect Donald Trump has announced plans to retain seized Bitcoin as a strategic investment asset instead of selling it on the market. In an interview with CNBC, when asked, "Do you have plans to build a BTC holding strategy?" Trump responded affirmatively, saying "Yes." However, he did not specify whether the Federal Reserve or the Treasury Department should accumulate Bitcoin. Trump's remarks provided some hope to Bitcoin investors. Additionally, Cynthia Lummis, a Republican Senator from Wyoming, has proposed a bill directing the Federal Reserve to purchase 1 million BTC over five years. If passed, this bill could lead to Bitcoin being adopted as an asset by the central bank. However, according to Bloomberg, support within the Republican party is divided, making the bill's passage unlikely. This situation highlights the legal constraints preventing central banks from holding cryptocurrencies and the resultant market reactions. The challenge of reconciling cryptocurrencies with the existing financial system remains significant. While Bitcoin faces hurdles in becoming a traditional financial asset due to legal and regulatory issues, interest and discussions around Bitcoin continue. The future of the cryptocurrency market could change significantly depending on how laws and policies evolve.