In a rather interesting turn of events, several Bitcoin critics are beginning to retrace their steps. The latest on the list is former Federal Reserve governor, Kevin Warsh. According to him, Bitcoin now looks like a sensible investment.
In 2018 Warsh argued that Bitcoin was too volatile to be useful. Following Bitcoin’s recent positive price rallies and the influx of institutional money, the former Fed governor is now bullish on the legacy digital asset. In a recent interview with CNBC Squawk Box host, Andrew Ross Sorkin, Warsh said:
I think that Bitcoin does make sense as part of a portfolio in this environment where you have the most fundamental shift in monetary policy since Paul Volcker (former Federal Reserve Chair). This is a big shift that we’re seeing under the Powell Fed, rightly or wrongly.
Like many others, Warsh blamed the rising weakness of the dollar for Bitcoin’s recent boom. Furthermore, he claimed that Bitcoin was encroaching into gold’s market share since millennials are more interested in the digital asset.
So I’m not surprised in a period of dollar weakness that Bitcoin is doing what it’s doing. I’d also suggest that part of the move in Bitcoin is taking some of the bid from gold. I think if Bitcoin never existed, gold would be rallying more right now, but I guess if you’re under 40, Bitcoin is your new gold.