Ether Climbs 8% While Bitcoin Dominance Weakens

Fed Chair Jerome Powell: Bitcoin Competes with Gold, Not the Dollar

In a recent appearance at The New York Times’ DealBook Summit, Federal Reserve Chair Jerome Powell stated that Bitcoin is not a competitor to the U.S. dollar, but rather to gold, emphasizing its role as a speculative asset. Powell further noted that Bitcoin, being highly volatile and digital in nature, is not being used as a store of value or a medium of exchange, but instead as a digital form of gold.

While Bitcoin has remained relatively flat, Ethereum (ETH) experienced a strong surge on Wednesday, gaining 8% to rise above $3,880. This increase was largely driven by $800 million worth of short positions closing, according to Tom Dunleavy, a partner at Master Global. Additionally, James Van Straten, Senior Analyst at CoinDesk, pointed out that Ethereum is benefiting from a capital influx similar to the bullish momentum seen in 2021.

Bitcoin’s dominance in the market has decreased significantly from 61.85% on November 21 to 54.84%, with Solana also seeing a decline. Van Straten explained, “Bitcoin has stayed flat, so Ether is catching up,” which is helping fuel strong performance across many altcoins in the CoinDesk 20 Index. While the overall CoinDesk 20 Index is up 1.83% today, driven by Ether’s gains, altcoins like Ethereum Classic (ETC), Filecoin (FIL), Polkadot (DOT), and Uniswap (UNI) have risen by 22%, 18%, 17%, and 16%, respectively.

Powell also briefly addressed inflation and the Federal Reserve’s cautious approach to fiscal neutrality. When asked about Bitcoin’s rise amid concerns over the U.S. dollar, Powell dismissed the idea of Bitcoin challenging the dollar, focusing instead on its role as an asset similar to gold. He reiterated that when it comes to cryptocurrency, the Fed’s priority is to ensure the stability of the banking system and protect consumers.