Bitcoin Slides Towards $96,000 After Fed Chair Powell Speaks Against Trumps Strategic BTC Reserve Plan
U.S. Federal Reserve Chairman Jerome Powell clarified Wednesday that the Fed is not allowed to own Bitcoin (BTC), aligning with the Federal Reserve Act. Powell indicated no intention to pursue changes to this legislation amid a promise by President-elect Donald Trump to establish a national strategic Bitcoin reserve.
The price of Bitcoin sank below the $100,000 mark following Powells comments against forming a national Bitcoin reserve. BTC dropped some more today to a current price of $96,847, just two days after rising to its new all-time high above $108,000. The leading cryptocurrency is now down 6.2% on the day amid a crypto bloodbath, according to CoinGecko data.
Bitcoin Ownership Prohibited For The Fed
Feds Jerome Powell has dismissed speculations about the U.S central banks potential involvement in building a national Bitcoin reserve, citing legal restrictions prohibiting it from owning the worlds largest crypto.
Powell noted that the Federal Reserve is not looking for legislative amendments to allow BTC ownership, adding that any potential changes to this policy would require Congressional action.
The Federal Reserve Act says what we can own, and were not looking for a law change. Thats the kind of thing for Congress to consider, but we are not looking for a law change at the Fed, Powell stated.
Bitcoin Reserve Under Trumps Administration
Former U.S. President Donald Trumps win against Kamala Harris in the November Presidential election has bolstered optimism for more pro-crypto policies. One of the most highly awaited bills is the Bitcoin Act, championed by Wyoming Republican Senator Cynthia Lummis, which proposes the establishment of a strategic Bitcoin stockpile for the US.
If passed, the bill would direct the U.S. Treasury to buy 5% of the total Bitcoin supply 1 million Bitcoins over five years to be held for 20 years.
Interestingly, the U.S. government already holds billions of dollars worth of Bitcoin confiscated via criminal cases. This puts considerable Bitcoin reserves under government custody.
According to Arkham Intelligence, the U.S. government currently holds roughly $20.7 billion worth of Bitcoin, along with other crypto assets. Its unclear whether these funds will be incorporated into the proposed U.S. strategic reserve.
Trump recently doubled down on his strategic reserve plan last week, saying, Were gonna do something great with crypto, cause we dont want China, or anybody else, not just China, others are embracing it, and we want to be the head.
But whether Lummis legislation will garner widespread backing within Congress is anyones guess.
Text source: ZyCrypto
