As the 2024 presidential election approaches, the idea of the United States government establishing a strategic Bitcoin reserve is gaining momentum. This potential policy shift has been championed by former President Donald Trump and pro-crypto Senator Cynthia Lummis, who see it as a novel way to help pay down the country’s $35 trillion national debt.
The concept was recently explored in depth by Bitcoin-focused financial institution River in a detailed video analysis, arguing that accumulating Bitcoin as a strategic reserve could provide several key advantages for the US government.
Bitcoin Reserve As Antidote To US Debt Crisis?
Beginning with the example of the United States, the firm points out the nation’s national debt, emphasizing the critical need for actions that can fortify the country’s financial standing.
River posits that one method to bolster this position involves acquiring assets that appreciate in value over time, potentially enabling the country to offset a substantial portion of its debt in the future, given that the asset appreciates faster than the rate at which new currency is printed.
Drawing attention to Bitcoin’s notable yearly average growth rate over the past decade, River showcases the chart below, which displays BTC’s surge of over 60%, underscoring its limited supply of 21 million coins, positioning it as scarcer than traditional stores of value like gold and fiat currencies.
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The video also references El Salvador’s Bitcoin reserve strategy, highlighting the nation’s acquisition of approximately 5,800 BTC valued at around $340 million, with a notable profit margin of 38%, equating to approximately $50 million.
Comparatively, the United States is one of the largest Bitcoin holders globally, possessing 213,246 BTC, predominantly sourced from the Silk Road marketplace confiscation and funds stolen from the Bitfinex exchange.
River advocates that if the US were to secure 5% of the total BTC supply, it could substantially alleviate a significant portion of the national debt burden.
Moreover, the firm posits that establishing Strategic Bitcoin Reserves by more countries could amplify Bitcoin’s value proposition, potentially catalyzing a domino effect where nations vie to adopt similar strategies to avoid falling behind in the evolving financial landscape.
The firm concluded by stating that implementing a Bitcoin…
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