All Central Banks wish to control the money supply. The Federal Reserve is no different. To date Bitcoin and Ethereum alone are off approximately $1.4 Trillion from their collective peak (this type of inflation is not captured in CPI statistics nor in the velocity of money – which helps explain why velocity did not accelerate as stimulus checks were mailed – people were buying Technology stocks and Crypto).
We continue to expect the Federal Reserve to roll out its version of a Central Bank Digital Currency (CBDC), over the next few years. The Boston Federal Reserve Bank is spearheading this effort. Part of making the Fed’s CBDC effort a success is to reduce interest in non-Fed digital currencies such as BTC and Ethereum. The logical way to reduce interest is through regulation. The Fed, Treasury and the SEC fired a shot at stablecoins last year. Today, Fed Chair Powell called for Crypto regulation (see YouTube clip).