Warren Davidson (R-Ohio) questioned the long-term viability of crypto in the U.S economy.
Powell said that cryptocurrencies seem to be here to stay.
Recently, U.S. Federal Reserve Chairman Jerome Powell expressed optimism about the cryptocurrency market. In his testimony before Congress, Powell defended the sustainability of cryptocurrencies as an investment category in the United States.
Witnessing before the House Committee on Financial Services about the Federal Reserve’s Semiannual Monetary Policy Report, Powell made this remark.
Throughout the meeting, Rep. Warren Davidson (R-Ohio) questioned the long-term viability of cryptocurrency in the United States economy. The overall market value of all cryptocurrencies, according to Davidson, is close to $1.1 trillion, and he questioned Jerome Powell on whether or not he believed in the long-term sustainability of the cryptocurrency.
Powell said that cryptocurrencies seem to be here to stay, but noted that their market value has dropped over the last year.
As an interesting side note, Nasdaq defines “staying power” as the ability to sustain exposure to a market notwithstanding a fall in the value of assets. If Powell agrees that crypto possess staying power, it’s because he sees potential in it.
Increased Regulatory Scrutiny
When the FTX exchange crashed in November, the whole market value of cryptocurrencies took a major hit. Once FTX collapsed, the total market capitalization dropped below $1 trillion. The industry was rocked to its foundations and now started to worry about the security and regulation of cryptocurrency exchanges. There has been increased regulatory scrutiny in the U.S especially by the SEC.
Representative Davidson brought up the topic of crypto volatility throughout the session, attributing it in large part to the current legal uncertainty. Authorities have increased their monitoring and pressure on the crypto industry in recent months.