“Of course you know we can only speculate. But when you measure it in terms of dollars you have to think it’s [Bitcoin] going to infinity,” Powell said. “And I think the true believers will tell you that it’s going all the way to the moon, to Mars, and eventually it would be the world’s currency,” he added.
Chang then asked Powell to clarify his answer in terms of a numeric amount. He reiterated that true believers in Bitcoin expect it to replace all the world’s currency. “So that means basically whatever the market cap of the dollar is, the euro; all of that combined is what Bitcoin could be worth,” he explained.
He added that a $1 million price level in the next 10 years was very reasonable.
Hedging Bets on Bitcoin
Powell said that the rate at which the U.S. continues to print money would be a factor in how soon BTC reaches his astronomical predictions.
“I think people are increasingly looking to Bitcoin as a safe haven asset,” he said. “They see it as a better version of gold, and something to protect them against all of this inflation that’s happening.” Powell singled out younger people in particular as taking notice of it.
Powell said as much when he appeared on Bloomberg Surveillance in December 2020. He asked rhetorically, “How do you justify not having bitcoin on your balance sheet with the kind of inflation that we’re seeing now in the market?”
He expressed that holding dollars seemed like a “risky prospect” compared to BTC, which he said is “finite, predictable, and even a greater store of value than something like gold.”
Chang asked Powell whether BTC’s continuing volatility made him waver in his belief. “No, it doesn’t make me waver at all,” Powell promptly replied. He said the system had continued to prove itself over the past decade, as upgrades have made it more robust, and adoption has steadily increased.
He did however say that BTC was an inappropriate asset for speculators. “I think there are a lot of weak hands out there,” he said. “They come in and day trade. They don’t really understand the fundamentals of Bitcoin.” He said those investing in BTC should be prepared to hold for at least five years, to withstand short term volatility. “The price could move up and down 50% on any given day, and you have to have strong conviction to hold through that.”