Mary Daly, the San Francisco Federal Reserve president, has weighed in on this debate.
Daly, in a recent article, argued that cryptocurrency should be treated as a separate asset class and not grouped with gold, which is what it’s usually referred to.
Definition of crypto: it’s more than a commodity
Daly said on Yahoo Finance’s podcast Opening Bid: “I think crypto is a complex thing. The service we should provide for all is to unpack it and then call it by its proper name.”
She stressed that cryptocurrency could play multiple roles – a currency, medium of exchange or asset that has the potential to appreciate in value or decrease in value – and that this term requires a clear definition.
Daly continued, “I don’t see it like gold.”
Although it has some properties similar to gold, I do not think of it that way.
Different views in the Fed
Daly’s view is a small departure from that of Federal Reserve chair Jerome Powell who, earlier in the month, energised the crypto-community with his remarks on bitcoin.
Powell compared bitcoin to digital or virtual gold, describing it as a speculative investment.
Powell, speaking at the New York Times DealBook Conference said that people do not use bitcoin as a means of payment.
Highly volatile. This is not the same as gold; this is a rival to dollar.
It is possible to become a currency
Daly echoed Powell’s statement, saying that crypto has not been ready for use as currency yet, despite aspirations from many crypto enthusiasts.
Daly explained that “the property needs to grow with the growth of the economy.”
Its value does not change because more people want to buy it. When more people desire a dollar note, its value doesn’t increase. The dollar fluctuates due to the economic situation and the relative growth of our country. This is the property that it must perfect to become a currency.
Crypto market continues to grow despite uncertainty about regulatory issues
The momentum for digital assets is growing despite the fact that Congress has yet to officially recognize them as currency.
Bitcoin’s gains have been significant since Donald Trump was elected on November 5. It broke through $100,000 for the first-time on December 4, breaking the $100 mark.
The price of bitcoin has risen by 38% from Election Day to date and is 106% more this year.
The growth of crypto-linked stocks such as Coinbase (COIN), Robinhood (HOOD), and others has also been impressive.
The Trump Factor and Institutional Adoption
Recent institutional investments, which typically prefer traditional assets, also reflect the growing sentiment in favor of crypto.
Wisconsin pension fund bought over $160 Million in Bitcoin shares last May. This shows that traditional financial institutions are increasingly accepting bitcoin.
Michael Saylor is the leader of MicroStrategy, which has been aggressively acquiring bitcoin.
David Sacks, a venture capitalist who was appointed by the new Trump Administration as its crypto-czar, may be opening up new opportunities for initiatives such as creating a bitcoin reserve.
Mark Palmer, an analyst at Benchmark Company, said in Opening Bid that “just the mere fact there is someone focused on making America a leader of crypto, bitcoin mining and other areas which President Trump has spoken about, represents a sea-change.”
In our analysis, we assume that the bitcoin price will hit $225,000 in 2026.
The fact that bitcoin adoption is increasing among institutions, he said, was also important.
The post Crypto’s Identity Crisis: Fed’s Daly Says it’s not gold, Needs its Own Definition may be updated as new developments unfold.
