Jerome Powell reiterates his opinion about Bitcoin as a gold substitute, but a sell-off accompanies his other criticisms.
While Bitcoin (BTC) is too volatile to be money and is "backed by nothing," it could be a "substitute for gold," said the chair of the United States Federal Reserve.
Speaking at an event hosted by the Bank for International Settlements, or BIS, on Monday, Jerome Powell delivered frank comments in response to a question on cryptocurrency.
Powell takes issue with Bitcoin's backing
When asked whether he thought Bitcoin and other cryptocurrencies posed a threat to financial stability, Powell wheeled out familiar arguments that have long come from legacy finance figures.
"Crypto assets — we call them 'crypto assets' — they're highly volatile — see Bitcoin — and therefore not really useful as a store of value, and they're not backed by anything," he said.
"They're more of an asset for speculation, so they're not particularly in use as a means of payment.