Crypto’s Unique Identity
The world of cryptocurrency is often misunderstood, with many lumping it together with gold as a single asset class. However, San Francisco Fed president Mary Daly believes that crypto deserves its own distinct category. In a recent podcast, Daly emphasized the need to define what crypto truly is, beyond its various uses as a currency, medium of exchange, or store of value.
A Complicated Asset
Daly’s assessment differs from that of Fed Chair Jerome Powell, who views bitcoin as a speculative asset similar to gold. While both agree that crypto is not yet ready to be considered a full-fledged currency, Daly highlights the unique properties that set it apart. “It has properties like gold sometimes, but I don’t think of it like that,” she explained.
The Path to Currency Status
For crypto to achieve currency status, it must demonstrate the ability to grow alongside the economy, rather than fluctuating wildly based on demand. As Daly put it, “Its value doesn’t change just because people want it.” Until then, crypto remains a distinct asset class with its own strengths and weaknesses.
Market Momentum
Despite the uncertainty surrounding its status, the crypto market continues to surge forward. Bitcoin has broken through the $100,000 mark, with prices up 38% since the election and 106% higher this year. Crypto-linked stocks have also seen significant gains, with Coinbase and Robinhood surging 45% and 204%, respectively.
Institutional Investment
The growing momentum behind crypto has attracted attention from traditional investors, with Wisconsin’s pension fund adding bitcoin to its holdings and MicroStrategy continuing to aggressively buy into the market. The new administration has also appointed a crypto czar to oversee related initiatives, including the potential creation of a bitcoin reserve.
A Sea Change
According to Benchmark Company analyst Mark Palmer, the increased institutional adoption of bitcoin is a key factor in its growing success. With the price of bitcoin predicted to reach $225,000 by the end of 2026, it’s clear that crypto is here to stay. As Palmer put it, “Just the fact that there would even be someone who would be focused on making the United States a leader in crypto, bitcoin mining, and other areas is a sea change.”
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