Not long after his comments, Bitcoin surged to over $100,000.

During the New York Times DealBook Summit on Wednesday (Dec. 5), an interviewer asked Powell if he thought the recent surge in the price of Bitcoin represented a loss of faith in the U.S. dollar and the Federal Reserve system more generally. Powell answered, "I don't think that's how people think about it."

He emphasized that people use Bitcoin as a "speculative asset." He went on to assert that the cryptocurrency is "just like gold, only it's virtual."

"People are not using it as a form of payment or as a store of value; it's highly volatile."

And he emphasized, "It's not a competitor for the dollar."

"It's really a competitor for gold, that's really how I think about it."

Bitcoin has surged from $69,363.70 to over $100,000 since Donald Trump's election victory. The cryptocurrency is up 133.87 percent this year.

Gold has also had a strong year. Despite selling off with the "Trump shock," it is still up over 28 percent on the year.

With a market capitalization of $1.92 trillion, Bitcoin has surpassed silver as the eighth most valuable asset in the world with a market value of $1.75 trillion. But it is still far behind gold, with a market value of nearly $18 trillion.

Is Powell Right About Bitcoin and Gold?

Let's break down Powell's comments and see how they stack up against reality.

He's correct in that Bitcoin behaves more like a speculative asset than a currency. It has generally correlated closely with tech stocks.

Powell is also correct to note the volatility of Bitcoin. While the price of Bitcoin has been generally upward over time, it tends to be extremely volatile in the short term.

Since its inception in 2009, Bitcoin's price has experienced dramatic swings. Starting at fractions of a cent, Bitcoin reached $1,000 in 2013, signaling its potential as a financial tool. However, this milestone was followed by a sharp correction. By 2017, Bitcoin had surged to nearly $20,000, attracting both institutional and retail investors. This was followed by a dip to $3,200 in 2018. In 2021, Bitcoin soared past $60,000, driven by macroeconomic factors like inflation and institutional adoption, only to dip again back into the 30s.