Jerome Powell Says the Federal Reserve Cannot Hold Bitcoin, Leaving the Decision to Congress

Jerome Powell Fed Chair has made a point during a press conference that the U.S. central bank is not allowed to hold Bitcoin.

Federal Reserve Chair Jerome Powell has confirmed that the central bank is not permitted to hold Bitcoin, leaving the decision to Congress.

During a press conference on Wednesday, Powell was asked about the possibility of the U.S. government building a Bitcoin reserve, similar to how it holds gold.

“We're not allowed to own bitcoin. The Federal Reserve Act says what we can own, and we're not looking for a law change. That's something for Congress to decide, not the Fed,” Powell said.

These statements come amid growing interest in Bitcoin as a potential asset for the U.S. government to hold. President-elect Donald Trump has supported the idea, suggesting that the U.S. should not fall behind other countries in the global crypto race.

Some pro-crypto senators, including Senator Cynthia Lummis from Wyoming, have also been pushing for this idea. Lummis has even drafted a bill requiring the U.S. Treasury to buy one million Bitcoin over the next five years.

Following Powell’s comments, the cryptocurrency market reacted quickly. Bitcoin dropped to $100,300, down about 5.7% over the past 24 hours. At the time of press, Bitcoin was trading at $100,740.

The broader cryptocurrency market also took a hit. Ethereum fell by 6.8%, Binance Coin (BNB) dropped by 4.6%, and Solana (SOL) by 8.1%. Dogecoin (DOGE) performed the least among the top 10 ranked tokens, dropping by 11% to $0.348.

The stock market also reacted negatively to Powell’s comments. The S&P 500 closed with a loss of 1.55%, and the Nasdaq 100 dropped by around 2%.

These reactions highlight how the market is closely tied to news about government policies, especially when it comes to cryptocurrencies like Bitcoin. Powell’s stance on not supporting a Bitcoin reserve created uncertainty among investors, who quickly adjusted their positions by selling.

Powell's comments and their impact on the market demonstrate how Bitcoin and other cryptocurrencies are heavily influenced by investors and policymakers.