What Fed Chair Powell said about crypto that may have contributed to bitcoin's price increase to $100,000.

• Federal Reserve Chair Jerome Powell may have given Bitcoin an extra boost with his meteoric run.
• The central bank leader stated on Wednesday that it's not a rival to the dollar, but rather to gold.

Federal Reserve Chair Jerome Powell may have given Bitcoin an extra boost with his meteoric run.

The central bank leader stated on Wednesday that he does not own any cryptocurrency and that the Fed's role in regulating bitcoin and its competitors is limited.

He argued that gold, rather than the challenge, is the traditional currency like the U.S. dollar.

"According to Powell, people use bitcoin as a speculative asset, similar to gold but virtual and digital. Unlike other forms of payment or storage of value, bitcoin is highly volatile and not a competitor for the dollar, but rather for gold."

The comments of Powell, whether intentional or not, gave legitimacy to bitcoin and helped drive another leg higher. Bitcoin surged 4% in morning trade on Thursday, breaking the $103,000 mark.

The comparison of bitcoin to gold by the Fed chair is a significant development that adds another level of credibility to bitcoin as a major asset in global markets, according to Joel Kruger, market strategist at LMAX Group, which operates an exchange for currency and crypto trading.

"The difference in size between gold and bitcoin, with gold being 10 times larger, provides insight into the potential for bitcoin to grow further," he stated.

Bitcoin began the year with a sharp rise, but then largely traded within a volatile range until the presidential election on November 5th. Since then, it has surged close to 50%, fueled by the pro-crypto remarks of the president-elect, which took bitcoin past the $100,000 mark on Wednesday. In contrast, Ethereum has remained relatively flat since the election, but is up nearly 30% year to date.

Unknown is the extent to which Powell's comments contributed to the last move's momentum.

On the same day that Trump announced his intention to nominate crypto supporter Paul Atkins as chair of the Securities and Exchange Commission, remarks comparing it to Bitcoin were made.

The key regulatory post could provide a smoother market ride after the current SEC leader, Gary Gensler, has been critical of the crypto industry.