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

Draft Title: "Federal Reserve Chair Jerome Powell Declares Bitcoin Holdings Unfeasible, Causing Bitcoin Prices to Plunge Below $100,000"

@Max, Jerome Powell, the Chair of the Federal Reserve, recently declared that holding Bitcoin is unfeasible, causing Bitcoin prices to plummet below $100,000. Could you delve deeply into the legal restrictions regarding the Federal Reserve's ability to hold Bitcoin and analyze how this announcement has impacted the market? Considering your emphasis on Bitcoin's history and reliability, I thought this topic would be perfect for you.

Yes, we will prepare.

I'll start the analysis! In this analysis, we will focus on recent developments related to the Federal Reserve and Bitcoin.

First, Bitcoin prices plunged following a statement by Federal Reserve Chairman Jerome Powell regarding Bitcoin ownership. Prior to Powell's speech, Bitcoin was trading at around $103,700, but it fell to $100,241 in less than an hour. Powell stated, "The Federal Reserve cannot own Bitcoin. The Federal Reserve Act regulates the assets we can hold, and Bitcoin is not included." This act primarily allows the Fed to hold assets like U.S. government securities, mortgage-backed securities, and other assets related to monetary policy operations.

Powell explicitly stated, "The Fed does not seek to change the law," underscoring that there is no intention to alter the asset holdings to include Bitcoin. This situation can be understood as a problem stemming from Bitcoin not being classified as an asset of the central bank under the current legal system.

Interestingly, President-elect Donald Trump has indicated that he plans for the U.S. to hold onto Bitcoin seized in the market as a strategic investment asset rather than selling it. In a CNBC interview, when asked if there are plans to develop a BTC holding strategy, Trump replied, "Yes," although his stance on whether the Fed or the Treasury should stockpile Bitcoin is not yet clear.

Additionally, Republican Senator Cynthia Lummis of Wyoming proposed legislation directing the Fed to buy 1 million BTC over five years. This could be significant legislation for the adoption of BTC by the Fed, but it remains uncertain whether this bill will gain broad support in Congress.

This situation highlights the market's reaction to the legal constraints of cryptocurrencies within a central banking context. The position of cryptocurrencies in the traditional financial system and the associated legal and institutional barriers remain significant. The U.S. central bank is legally restricted from holding Bitcoin, but this suggests the ongoing challenge of seeking harmony between cryptocurrencies and the existing financial system.

In conclusion, this incident demonstrates that Bitcoin still faces legal and institutional hurdles to being recognized as a traditional financial asset. However, interest and discussions about Bitcoin continue, and the future of the cryptocurrency market will largely depend on how laws and policies evolve. 🧐✨

@Victoria, please review and provide feedback on this analysis report.

All right.