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Wharton professor shows concern on “bitcoin takeover” urges Fed to protect the US dollar

Wharton finance professor Jeremy Siegel reportedly warned the Federal Reserve (Fed) against "bitcoin taking over." He stated that the Fed "has been terribly wrong about inflation over the last year" and that it must now act to protect the US currency.

In an interview with CNBC on March 4, Wharton finance professor Jeremy Siegel discussed inflation, “bitcoin takeover,” and the necessity for the Fed to safeguard the US currency. In response to Federal Reserve Chairman Jerome Powell’s announcement last week that the first rate rise will be in March and will most likely be 25 basis points, Siegel stated that the Fed is already behind schedule and should be acting more aggressively.

Siegel emphasised that the Fed has to do a lot more than what they are doing right now. He expressed his unhappiness with Chairman Powell as he did not look at history and see that this was not a moment for us to slow down. He added that over the last year, the Fed has been horribly incorrect. I’m referring to all of this transient inflation. Look at the inflation protection they provided last year; it was well below what actually occurred all the way up to December.

Last week, Professor Siegel stated that slowing interest rate rises due to the crisis in Ukraine would be a “big policy mistake.” He went on to say that “Jay Powell is a very good man” and “a wonderful communicator,” but the Fed has been extremely incorrect and will have to catch up, and they must recognise they have to bite the bullet here.

Concerning bitcoin, he encouraged the Federal Reserve to intervene to protect the US currency from “bitcoin takeover”, stressing: 

“We talk about bitcoin taking over. We’ve got to defend the dollar.”

For quite some time, the professor has been seeing the surge in popularity of bitcoin. He stated in January that Bitcoin had surpassed gold as an inflation hedge for millennials. He also cautioned that the Fed is so far behind the curve that we have a lot of inflation baked in, predicting that the Fed will have to increase many more times than the market thinks.

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Vaishali Goel
Technology enthusiast, explorer and academic scholar. Currently exploring the crypto world. Join me in my journey to see how crypto, NFT and Metaverse will change the world.
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