Bitcoin Still Has ‘No Legitimate Use Case’ Over A Decade Later, Fed’s Neel Kashkari Quips

Bitcoin Still Has ‘No Legitimate Use Case’ Over A Decade Later, Fed’s Neel Kashkari Quips

Time Stamp: April 9, 2024 11:01 AM

Pressure grows on Wall Street Banks to accept Bitcoin as a legitimate asset class

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The president of the Federal Reserve Bank of Minneapolis, Neel Kashkari, recently took a jab at Bitcoin (BTC) by comparing the benchmark crypto to Beanie Babies, upping his rhetoric against cryptocurrencies. 

Kashkari’s Bitcoin-Beanie Baby Comparison

Kashkari’s comments were in response to a question put forward by Jennifer Ablan during a LinkedIn conversation. Jennifer asked the central banker:

 “When will the Fed put Bitcoin on its balance sheet? You already said on record that you have an unlimited supply of dollars, doesn’t it make sense to trade some of them for a currency with a hard cap?”

In response, Kashkari asserted that Bitcoin’s hard cap is zero, suggesting its market cap is poised to collapse to zero. He then likened the OG cryptocurrency to Beanie Babies — the plush toys that drove Americans into a buying frenzy in the 1990s.

“[Bitcoin has] no actual utility in the economy other than being a nice toy that some people enjoy owning and trading,” Kashkari opined.

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Kashkari previously said the Fed had infinite cash. Notably, this kind of quantitative easing strategy is a boon for Bitcoin and other crypto assets. 

The Fed president then trotted out a tired analogy, claiming most people are utilizing Bitcoin to “subvert banking regulations, get around either marijuana banking, or [conduct] illicit activities.”

Since Bitcoin’s debut in 2009, critics have often pointed to the cryptocurrency’s role in facilitating nefarious activities by helping crooks avoid detection. However, research companies like Chainalysis or Elliptic have found that the vast majority of crypto use is legitimate.

Kashkari also says that crypto enthusiasts should be cautious about comparing Bitcoin’s success to multinational technology behemoth Amazon:

“The ‘Bitcoin bros’ would say…in 1994 nobody ever bought a book online, so [someone could say] Amazon has no future. This is not Amazon in 1994. This is Amazon in 2004. Bitcoin has been around for more than a decade, and more than a decade later, there’s still no legitimate use case in an advanced democracy.”

This isn’t the first time Kashkari has bashed cryptocurrencies. In early 2020, he claimed that digital assets like Bitcoin lack the basic tenets of a stable currency while saying they were akin to a “giant garbage dumpster.” At the time, he also lauded the U.S. Securities and Exchange Commission for “cracking down” on initial coin offerings.

Bitcoin traded for $69,320 per coin at publication time, down 3.34% over the past seven days.

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