Bitcoin slides toward $31,000 amid Fed Chair Powell remarks on stablecoins

Bitcoin slid toward $31,000 on Thursday, July 15 – its lowest level in around three weeks. The reason appears to be related to some recent comments from Federal Reserve Chair Jerome Powell on stablecoins.

Why should we care?
Regulators are grappling with approaches to oversee cryptocurrencies. In a House Financial Services Committee hearing this week, Fed Chair Powell said the U.S. had reached “a critical point” for regulation of digital currencies. His remarks about stablecoins may have raised some eyebrows: ”If they’re going to be a significant part of the payments universe – which we don’t think crypto assets will be, but stablecoins might be – then we need an appropriate regulatory framework," he said. The comments undermine the perception that cryptocurrencies like Bitcoin and others will become ubiquitous. “With the talk of central banks around the world exploring ideas for digital currencies, investors are realizing there’s a lot of competition in the space. That might dilute the valuation of some of the digital assets currently being used,” Brian Vendig, president of MJP Wealth Advisors, said in an interview. Still, some proponents of Bitcoin suggest the cryptocurrency is a bulwark against inflation. It remains to be seen if central bank chatter about stablecoins will have a longer-term effect on the value of Bitcoin and other cryptocurrencies.