The U.S. Federal Reserve has confirmed that it has no plans to engage in Bitcoin holdings or participate in government-led efforts to establish a strategic Bitcoin reserve.
This statement was delivered by Fed chairman Jerome Powell during a press conference on Wednesday, held after the conclusion of a two-day policy meeting.
Bitcoin Ownership Prohibited for the Fed
Powell reiterated that legal restrictions prohibit the central bank from owning crypto, dismissing rumors about the Fed’s potential involvement in creating a Bitcoin reserve.
The Fed chairman further clarified that any potential changes to this policy would require Congressional action. He stated that the Fed is not seeking legislative amendments to allow crypto ownership.
This clarification comes amid growing speculation regarding the Fed’s interest in digital asset reserves. However, the president-elect, Donald Trump, is pursuing the establishment of a strategic Bitcoin reserve for the United States.
Bitcoin Reserve Under Trump’s Presidency
A draft executive order prepared by the Bitcoin Policy Institute proposes the creation of this reserve under the Exchange Stabilization Fund (ESF) managed by the U.S. Treasury.
The draft outlines a framework to integrate Bitcoin into the nation’s financial stability plans. However, this executive order will require approval and formal signing by Trump after his inauguration to be implemented.
The U.S. government currently holds 212,847 BTC, valued at approximately $22.3 billion, acquired through law enforcement seizures.
Interest Rate Cuts and Crypto Market Impact
Notably, the Federal Reserve announced a reduction in the interest rate ceiling to 4.50%, a decline from the previous 4.75%, aligning with market expectations.
Despite the anticipated nature of this move, the cryptocurrency market saw a notable decline, with the overall market capitalization dropping by 4.4%. Bitcoin recorded a 2.64% daily loss, trading at $101,365 during this press, although it maintained a modest weekly gain of 0.65%.
The Federal Reserve’s dot plot further revealed a reduced forecast for rate cuts in 2025, lowering expectations from four reductions to two. Powell stated that future rate adjustments would proceed cautiously, contingent upon inflation trends. It could take up to two years to meet inflation targets, making rate hikes unlikely in the near term.
Bitcoin Resilience Above $100K
Elsewhere, analysts from blockchain platform Santiment noted that Bitcoin’s resilience above the $100,000 mark, despite the broader market dip, reflects underlying strength compared to traditional assets like the S&P 500.
The platform also noted that the Federal Reserve’s indication of a 50 basis point rate cut through 2025 is only half of what the public had anticipated before the latest FOMC meeting.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
