Federal Reserve Chair Jerome Powell said on Wednesday the U.S. central bank has no desire to be involved in any government effort to stockpile large amounts of bitcoin.

Bitcoin's price dipped Wednesday after Federal Reserve Chairman Jerome Powell said the central bank is not looking to hold the cryptocurrency.

Federal Reserve Chair Jerome Powell has ruled out the possibility of the central bank adding Bitcoin to its balance sheet, citing legal restrictions under the Federal Reserve Act. Powell addressed the issue during a Dec. 19 press conference, emphasizing that the Fed is not pursuing any legislative changes to alter this position.

Bitcoin has shed some $4,000 overnight after Fed Chair Jerome Powell said the U.S. central bank isn't allowed to own $BTC, which is a fact that may have affected optimism in the crypto market.

Bitcoin tumbled more than 5% on Wednesday, its sharpest decline in over three months, as the Federal Reserve adopted a cautious approach to future interest-rate cuts. As per the report by Bloomberg, the digital asset,

The Federal Reserve has dismissed the possibility of holding a Bitcoin reserve, citing legal and institutional limitations. Fed Chair Jerome Powell reiterated this stance during a routine press conference following the year’s final Federal Open Market Committee (FOMC) meeting,

Federal Reserve chairman Jerome Powell on Wednesday said that the central bank has little appetite for holding a Bitcoin stockpile. “We are not allowed to own bitcoin,” Mr Powell told reporters after the Fed lowered interest rates by 25 basis points to its current target range of between 4.