Powell opens up on Bitcoin: 'It competes with gold, not the dollar'

After 5,843 days of life Bitcoin crosses the psychological and symbolic threshold of $100,000. It was 3 January 2009 when the first block on Bitcoin's blockchain was mined. Sixteen years later, that computer protocol made available to all by the still unknown Satoshi Nakamoto has reached a market valuation of over $2 trillion. Putting it, in the grid of the world's most capitalised asset classes, in seventh place. Before silver (1,770 billion) and immediately behind Google (2,150 billion) and Amazon (2,300 billion).

It is a web-native computer protocol (BTC) that complements the TCP/IP (web) and SMTP (email) protocols, enabling the transfer of value in a decentralised manner, without the need for intermediaries. Asymmetric encryption ensures the security of transactions, while the blockchain prevents double spending, recording each transaction transparently and immutably. The characteristics of finiteness (only 21 million Bitcoins can be mined), transferability and incensurability make Bitcoin a potential new store of value. Because although it is an intangible technology unlike a gold bar, it has, in some ways even in an improved key, the same characteristics that man has hitherto sought in stores of value and has attributed to gold for millennia.

A few hours ago Federal Reserve Governor Jerome Powell clarified: 'Bitcoin is a competitor to physical gold, not a threat to the dollar'. Meanwhile, Donald Trump has chosen the next secretary of the SEC, the equivalent of the US Securities and Exchange Commission. The name is Paul Atkins as the next chairman of the Securities and Exchange Commission (SEC). Atkins, former commissioner of the SEC from 2002 to 2008, is known for his pro-cryptocurrency positions and his criticism of excessive market regulation. In 2018, he stated, "Bitcoin is a revolutionary technology and its potential should not be stifled by excessive regulation."

The United States, after Trump's victory, seems to want to focus firmly on the crypto-industry. The market is taking notice and has taken Bitcoin's valuation to all-time highs. In this climate of enthusiasm, alternative coins are also running. Ethereum, the second crypto, jumped to the $3,900 area (equivalent to $465 billion capitalisation). Right now, all exchangeable cryptocurrencies have a capitalisation of 3.6 trillion. Among them, many are purely speculative forms that will most likely disappear or lose almost everything at the next 'bear market'. At the moment, the same cannot be said of Bitcoin, which after experiencing speculative bubble phases in each of the previous four-year cycles has always rebounded and made new highs in the next cycle.

History is repeating itself again this time around. With the difference being that there is now an increasingly cumbersome presence of institutional investors who can, as for example the pension funds of Wisconsin and Michigan have done, place Bitcoin in their portfolios through the door of the Etf's that landed on Wall Street last 11 January at the end of a painful approval by the resigning chairman of the SEC, Gary Gensler.