Warsh sees Bitcoin as the new gold for the present generation. Bitcoin investments are soaring rapidly. Kevin Wash, former Federal Reserve governor, expresses optimism about the continuous surge in the value of Bitcoin. He credited the current rise in the asset’s price to the steady fall in the US dollar.
In his comments, Warsh noted that those should see Bitcoin under 40 as the next gold. He also recommended Bitcoin as the new investment destination for the present generation. The former Fed governor was in the past skeptical about Bitcoin. Now, he has reversed his previous stance on the revolutionary asset. The ongoing crypto boom and positive attitude of the regulatory bodies have made the former Federal Reserve governor nod to Bitcoin, saying it “does make sense.”
Warsh admits that Bitcoin’s steady rise surprised him
Warsh revealed his recent stance on the asset while speaking with a CNBC reporter agreeing to Bitcoin as a reasonable investment option in this season. He attributed this phenomenal rise in the crypto value to a drastic change in monetary policy after Paul Volcker’s exit. “This is a big shift that we’re seeing under the Powell Fed, rightly or wrongly.”
What Warsh meant by “a shift in the monetary policy” is indeed the Federal Reserve’s position on stimulus, to yield to the contemporary monetary theory, which states that countries that have their currencies have the freedom to spend far more than what they have. The new strategy of impliedly creating money from nowhere in recent months and the potential gains for the value of the US dollar in the future eventually boosted the overall value of cryptocurrencies.
Most investors are now looking at Bitcoin
The Ex-banker also attributed the ongoing surge in Bitcoin price (that is now shooting at $38,000) to the bearish trend the US dollar is witnessing and noted that Bitcoin had overtaken the dollar as investors’ preference, saying, “If you’re under 40, Bitcoin is your new gold.” In a 2018 article published by the Wall Street, Warsh affirmed his doubt about Bitcoin as an acceptable means of payment. Though he also thought that there was a possibility that the asset would replace gold as Investors’ bride in the nearest future.
In the same year, Warsh invested in Basis, a stablecoin that eventually crashed. George Soros and Druckenmiller were also investors in the same asset. Central banks lack control over digital currencies, including Bitcoin. This allows some investors to keep their investments away from banks or regulatory agencies.
In 2018, Warsh, who governed Fed from 2006 to 2011, considered the appointment of what he referred to as a Fedcoin. However, he couldn’t implement his plan, as Powell was later appointed as the Central Bank governor. The blockchain system is a transparent and decentralized means of exchange. Warsh sees that it will help fed operations and can be used to track the transfer of huge money across financial institutions.