For bitcoin lovers motivated by something other than amusement and greed, it's self-evident that blockchain will eventually render obsolete any individual who now occupies a privileged position in the legacy financial system. You don't reach this conclusion through rational argument, but through something like divine revelation. For the fat and happy occupants of the existing order, then, denying the inevitability of a bitcoin future is either an act of hubristic denial or an admission of pitiful ignorance. And that's why it's so satisfying to watch a guy like Jamie Dimon turnuphisnose at bitcoin and the basement-dwelling mongrels who support it. He plays the arrogant villain to a T.
So one can only imagine the delight in Cryptostan if, during Senate confirmation hearings Tuesday, Fed chair appointee Jerome Powell had taken the opportunity to denounce bitcoin, dismiss the revolutionary potential of the blockchain, and declare eternal victory for fiat money. Instead, when asked by Sen. Dean Heller about bitcoin's current, bonkers rally, we got this:
We are watching all of those technologies. It’s something we have to do, I think, and it’s something that’s actually enjoyable and interesting to do.
That's not right at all. There was no maniacal cackle, no self-satisfied guffaw, not even a subtle eye roll. Instead, Powell gave off a vibe that fell somewhere between broadly curious and just-a-second-lemme-check-my-Coinbase-account. It's actually kind of pleasing to imagine Powell holding onto a few bitcoins, at least for the dumb thrill of it. A crypto stash could serve as a sort of insurance policy against the unthinkable scenario of bitcoin actually displacing the dollar and thus Powell's employer. Sure, he probably doesn't have any bitcoins, but nothing in his comments Tuesday suggested otherwise:
There’s no question that valuations have really gone up quite a lot in the last year or so. I don’t have a view on the appropriate level of the valuation, of course. From our standpoint cryptocurrencies are something we monitor very carefully. We actually look at blockchain as something that may have significant applications in the wholesale payments part of the economy, something we pay close attention to.
That's not to say Powell wasn't somewhat dismissive of suggestions that the crypto rally might have the same kinds of wider economic consequences as the dot-com bubble:
In the long, long run [cryptocurrencies] could matter. They don’t really matter today. They’re just not big enough. There isn’t anywhere near close to enough volume for it to matter.
Despite alarmist suggestions to the contrary, this is the correct take. In purely market terms, cryptos are a fun little sideshow that we can all enjoy pointing and laughing at from the safety of a real economy and, hey, maybe even bet a few bucks on. For a soon-to-be Fed chairman, bitcoin is of as much concern as a stray kitten. He'll have to wait an see whether it will grow into a tiger or a housecat, but for now he's content to sit and smile at it.