Bitcoin More of a Gold Rival Than Actual Currency, Says St. Louis Fed President

Jim Bullard, President of the St. Louis Federal Reserve, has dismissed the value proposition of Bitcoin (BTC) based on some of the oft-quoted advantages claimed by BTC proponents.

• Speaking to CNBC on Tuesday, Bullard remarked that the Federal Reserve viewed Bitcoin as more of a rival to gold than an actual currency.
• According to Bullard, “For Fed policy, it is going to be a dollar economy and a dollar global economy as far as the eye can see.”
• For Bullard, the primacy of the U.S. dollar is not dependent on Bitcoin or gold, experiencing significant changes in price action.
• The St. Louis Fed President also remarked that Bitcoin was only one of the emerging digital currencies in the market.
• According to Bullard, a non-uniform currency regime is not desirable, arguing that people are already faced with a multitude of options when transacting with virtual currencies.
• Bullard also took shots at the apparent volatility of Bitcoin, stating that a currency should exhibit some stability to other currencies as well as goods and services.
• As part of his dismissal of BTC, Bullard also compared the largest crypto by market capitalization to ‘faux dollars’ created by U.S. banks during the American Civil War.
• While the likes of Bullard might not subscribe to Bitcoin as currency, major firms like Tesla are already moving towards accepting the cryptocurrency as a payment option.
• Indeed, the electronic vehicle giant recently added $1.5 billion worth of Bitcoin to its balance sheet.
• Bitcoin recently crossed the $50,000 price mark for the first time ever but has since seen a slight retrace, probably triggered by profit-taking at a new all-time high.
• BTC is up almost 70% year-to-date, with some commentators saying it is in the middle of a supercycle.