As a seasoned financial analyst with over two decades of experience in traditional markets, I’ve seen my fair share of fads and trends come and go. Having witnessed the rise and fall of numerous investment bubbles, I find myself skeptical about the idea of a strategic Bitcoin reserve in the US.
In simpler terms, Bob McElrath, who used to work as a blockchain architect at Fidelity Investments, has dismissed the concept of establishing a strategic Bitcoin reserve within the United States, referring to it as an unrealistic hope or illusion.
“It’s a dumb idea. Don’t expect the US to pump your bags. Bitcoin is small fry compared to the US economy,” he said.
The possibility of the US government creating a Bitcoin reserve has emerged as one of the main bullish catalysts.
According to a report from U.Today, Michael Saylor, co-founder of MicroStrategy, has advocated for the U.S. government to exchange its gold reserves for Bitcoin instead.
Senator Cynthia Lummis from Wyoming initially proposed the concept of establishing a strategic Bitcoin reserve in her bill submitted earlier this year. This idea has since garnered significant attention, sparking discussions among experts on whether it’s wise for the U.S. administration to adopt such a plan.
Nevertheless, some leading Bitcoin advocates, including Galaxy CEO Mike Novogratz, have expressed skepticism about the possibility of the U.S. government establishing a Bitcoin reserve. According to U.Today, if such a reserve were to be implemented, Novogratz predicts that Bitcoin’s value could potentially reach $500,000.
The idea has also attracted very strong pushback from some pundits outside the cryptocurrency space.
In simpler terms, it appears that the primary reasoning behind a Strategic Bitcoin Reserve is due to concerns among Bitcoin holders about running out of people who are willing to buy at higher prices (greater fools), and they believe the U.S. government should step in as the ultimate buyer of last resort. This was expressed by David Frum, a senior editor at The Atlantic, on social media.
According to James Surowiecki, who wrote “The Wisdom of Crowds”, he believes that the U.S. doesn’t have a tactical reason to possess Bitcoin.
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2024-12-24 11:29