@daily_btc_lore | Daily Bitcoin History Threads
Two Days That Framed How Washington Saw BitcoinTwo Days That Framed How Washington Saw Bitcoin
Over two days of testimony in July 2019, the most powerful central banker on earth was forced to explain Bitcoin to Congress. What he said about it surprised almost everyone.
The Real Target Was LibraThe Real Target Was Libra
The backdrop was not Bitcoin at all. In June 2019, Facebook had unveiled Libra, a proposed global digital currency backed by a consortium of 28 companies. Washington panicked. A company with billions of users launching its own money was a threat regulators took seriously and immediately.
Fed Chair Jerome Powell was already scheduled for his semiannual testimony to Congress that week, two days of routine questions on interest rates and the economy. Libra hijacked the agenda. Lawmakers wanted to know what the Fed planned to do about Facebook's money.
Day One: The HouseDay One: The House
On July 10, before the House Financial Services Committee, Powell was blunt about Libra. He warned it "could rise to systemic importance just because of the mere size of Facebook." Bitcoin fell roughly 7% over the three hours he spoke, dragged down purely by association.
That detail matters. In 2019, markets still treated Bitcoin and every other digital asset as one undifferentiated bucket. Powell criticizing Facebook's corporate coin was enough to sink Bitcoin, a completely unrelated, decentralized network with no company behind it.
Day Two: The SenateDay Two: The Senate
The next day, July 11, Powell moved to the Senate Banking Committee. There, Senator Mike Crapo asked him directly what he thought of Bitcoin as a threat to the dollar. Powell's answer became the most quoted thing he ever said about it.
"Almost no one uses Bitcoin for payments," Powell said. "They use it more as an alternative to gold. It's a store of value, a speculative store of value, like gold." The Fed Chair had just compared Bitcoin to gold on the record, in the Senate.
It was a genuinely two-sided statement. "Speculative" was a warning. But "an alternative to gold" was close to an endorsement of the exact thesis Bitcoiners had argued for years: digital gold, a store of value outside the banking system. Powell had conceded the framing.
The IronyThe Irony
Washington summoned regulators to confront a corporate coin, Libra, that never launched and died within two years. In doing so, the Fed Chair gave Bitcoin, the thing nobody called the hearing about, its most credible official description yet.
Part of an ongoing series on Bitcoin history. This event falls on July 10, 2019.
So much for free markets haha
One thing that stands out in hindsight is how the market treated every crypto asset as the same risk in 2019. Powell was responding primarily to Libra, yet Bitcoin sold off because investors hadn't fully separated centralized corporate digital currencies from decentralized networks.
His "alternative to gold" comment also ended up aging better than many expected. While Bitcoin remains volatile, the narrative around it has increasingly shifted toward a scarce store of value rather than a mainstream payment system.
It's also a reminder that macro policy and currency markets are deeply connected. Central bank decisions, inflation expectations, and confidence in fiat currencies all influence how people view assets like Bitcoin and gold. Following both crypto developments and traditional exchange rate movements gives useful context, especially in countries where currency depreciation directly affects purchasing power. Looking at both sides of the monetary landscape often tells a more complete story than focusing on Bitcoin alone.