Neel Kashkari, the Minneapolis Federal Reserve Bank president, recently stated that Bitcoin is still worthless, even after twelve years of existence.
Neel Kashkari shared his thoughts on the cryptocurrency, calling it an asset that has not proven itself to be a viable currency. Kashkari’s comments came alongside discussions on various economic issues, including the U.S. labor market and inflation trends.
Bitcoin’s Worthlessness According to Neel Kashkari
Neel Kashkari, the Minneapolis Federal Reserve Bank president has long been a doubtful of Bitcoin and other cryptocurrencies. He believes that even with their popularity and major growth in value, digital currencies like Bitcoin haven’t demonstrated practical use in the real world. Kashkari emphasized that Bitcoin’s longevity doesn’t make it a valuable asset. According to Neel Kashkari, Bitcoin is more of a risky investment than a stable store of value.
At the same time, Neel Kashkari expressed optimism about other emerging technologies. He particularly highlighted generative artificial intelligence, saying it has potential even with being around for just two years. In contrast, Neel Kashkari continued to have a negative opinion of Bitcoin, pointing out its failure to evolve into something more than a risky tool over the past 12 years.
Strong U.S. Labor Market and Declining Inflation
During the same discussion, Neel Kashkari shared some positive updates on the U.S. economy. He mentioned that the U.S. labor market has strengthened, with unemployment numbers dropping. Inflation is also showing signs of decline, but the Federal Reserve is committed to making data driven decisions moving forward.
Neel Kashkari rejected the idea of increasing unemployment to control inflation. He explained that decreasing labor demand would only lead to an increase in joblessness, which is not a worthwhile trade off. His stance remains that economic stability should not come at the cost of unnecessary unemployment.
China and the U.S. Dollar’s Global Dominance
Neel Kashkari also touched on the global economic scene, particularly concerning China. He stated that China isn’t a major economic threat to the U.S. and that its currency, the yuan, is unlikely to replace the U.S. dollar as the world’s reserve currency. This is in line with the Federal Reserve’s view that the U.S. dollar remains dominant and that the Chinese yuan doesn’t have the global reach to challenge it.
Bitcoin’s Performance vs. Other Asset Classes
Despite Neel Kashkari’s claims, Bitcoin’s performance over the years has been impressive. The cryptocurrency has seen notable growth, rising by 9% in 2012, 59% in 2016, and a massive 171% in 2020. Even in 2023, Bitcoin has outperformed many traditional asset classes, with a year to date (YTD) gain of 45%.
However, the third quarter of this year has been slow for Bitcoin. Its price remained mostly unchanged, with just a 0.8% increase. Gold, on the other hand, performed better, rising by 13.8% due to concerns over a potential economic slowdown in the U.S.
Growing Demand for Bitcoin ETFs
Even though Q3 was slow, interest in U.S. Spot Bitcoin ETFs has increased. According to reports, Bitcoin ETFs saw inflows of $253.54 million on October 11 and $555.86 million on October 14. This increased demand shows that, even with the challenges, people are still very interested in Bitcoin as an investment.
The Impact of U.S. Elections on Bitcoin
Looking ahead, the upcoming U.S. elections could play a major role in influencing Bitcoin’s future. According to a report from Jefferies investment firm, the elections will be an important event for the crypto industry. Both leading candidates Donald Trump and Kamala Harris have shown support for creating a more crypto friendly environment. Trump, in particular, has been outspoken about his desire to make the U.S. a leading center for cryptocurrency.
As Bitcoin’s price has risen by 2.14% in the last 24 hours and 4.48% over the past week. Right now, Bitcoin is priced at $67,146 showing good performance even with Neel Kashkari’s negative opinion.
Conclusion
Neel Kashkari’s stance on Bitcoin remains unchanged. He still considers the cryptocurrency worthless after more than a decade. However, even with his criticism, Bitcoin continues to perform well and remains a popular investment. The growing demand for Bitcoin ETFs, positive price trends, and the upcoming U.S. elections could all have a lasting impact on the cryptocurrency’s future.
