Bitcoin and blockchain pop up at Senate

Bitcoin and blockchain technology are increasingly becoming fascinating topics of conversation in the most interesting of places.

While testifying in front of the Senate Banking Committee, US President Trump’s nominee for chair of the Federal Reserve, Jerome Powell, answered a range of questions, some of which related to the crypto industry.

Senator David Perdue questioned Powell on his thoughts regarding cryptocurrency and blockchain technology.

“It’s a little bit off the wall, but I’m beginning to be very concerned that we have another bubble that is some four or five times the size of the dotcom bubble in the late 90s. And that has to do with the cryptocurrencies, like Bitcoin,” said Senator Perdue. “Bitcoin’s market value now is bigger than all but 29 of the S&P 500 corporations in America,” he added.

Powell answered,

“In the long, long run, things, cryptocurrencies, of that nature could matter. They don't really matter today. They're just not big enough. There isn't anywhere near close to enough volume for it to matter.”

This is partially true as determining precisely how much money has poured into the crypto market is difficult. However, Bitcoin holds the greatest concentration of value with $168 billion, with Ethereum following with $45 billion. Combined at $312 million, these two currencies account for 70% of the cryptocurrency market cap.

“That was the problem with the dotcom bubble too, on a different level,” interjected Senator Perdue. “There were so few entities and there was so much money interested in chasing it and that’s what happening now in the Bitcoin area,” he said in possible reference to the 21-million-unit issuance cap on Bitcoin. “The growth of [the dotcom bubble] was much, much faster than anybody thought at that time, too, in the late 90s,” Senator Perdue added.

Powell replied cautiously.

“Yes, there’s no question the valuations have really gone up quite a lot in the last year or so. I don’t have a view on the appropriate level of valuation, of course. Again, from our standpoint, cryptocurrencies are something we monitor very carefully. We actually look at blockchain as something that may have significant applications in the wholesale payments part of the economy, something we pay close attention to.”

Senator Perdue pushed a bit further.

“So, you’re watching what Alibaba’s doing in Asia today, relative to blockchain technology?”

“We’re watching all of those technologies. It’s something we have to do I think, and it’s something that’s actually kind of enjoyable and interesting to do,” Powell replied.

Powell also added that the Federal Reserve will continue to slowly increase interest rates in relation to conventional monetary policy.

If confirmed by the Senate, Powell will replace current chair, Janet Yellen, after her term ends on the 3rd of February 2018.

Author : Jack Dean

https://bitconnect.co/bitcoin-news/852/bitcoin-and-blockchain-pop-up-at-senate/