Bitcoin Strategic Reserve Can ‘Offset US Debt’: CryptoQuant Founder

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As a seasoned analyst with over two decades of experience in the financial industry, I find Ki Young Ju’s proposal for a Strategic Bitcoin Reserve (SBR) to offset U.S. debt an intriguing and bold idea. Given my extensive background in traditional finance and cryptocurrencies, I can appreciate the innovative thinking behind this suggestion.

Ki Young Ju, founder of CryptoQuant, proposes that strategically acquiring Bitcoin (BTC) could be an option for the U.S. to tackle a portion of its debt. This suggestion was made in a post on X as part of the ongoing discussion among cryptocurrency analysts and financial experts.

Proposal for strategic Bitcoin reserve

As per Young Ju’s proposal, it’s plausible to establish a Strategic Bitcoin Reserve (SBR) as a method to partially offset the U.S. national debt. This suggestion is based on the understanding that the U.S. debt consists of both domestic and foreign-owned obligations. In this plan, Young Ju suggests that the U.S. might acquire approximately 1 million Bitcoins over time. The strategic acquisition of this amount should ideally be carried out gradually up until the year 2050.

Young Ju’s strategy mainly aims at resolving domestic debt issues, as it could potentially erase 36% of the domestic debt. This equates to about 70% of the overall U.S. debt. Given his assumption that foreign creditors might be reluctant to accept Bitcoin as a form of payment, he primarily concentrates on dealing with domestic creditors.

Over the past 15 years, a total of $790 billion has flowed into Bitcoin, boosting its market value to $2 trillion. This year, an additional $352 billion in inflows have increased its market value by another $1 trillion. As such, investing strategic reserves in Bitcoin could potentially help balance out U.S. debt.

— Ki Young Ju (@ki_young_ju) December 21, 2024

Significantly, Young Ju has leveraged Bitcoin’s exceptional growth trajectory throughout the last 15 years. Bitcoin (BTC) has attracted substantial financial investments and has recently surpassed a market capitalization of $2 trillion.

Ju proposes that if the United States administration categorizes Bitcoin similarly to gold as a strategic asset, it might elevate its standing. Importantly, this would potentially grant Bitcoin the same level of esteem and formal recognition as a valuable store, comparable to gold.

Challenges to SBR implementation

While the theory presented by the founder of CryptoQuant appears plausible, there are substantial hurdles he anticipates. For Bitcoin to thrive as a reserve asset, it needs to be embraced by the market and earn the worldwide trust that gold currently enjoys. This is crucial for ensuring its legitimacy as a reliable store-of-value.

Furthermore, because Bitcoin is prone to sudden price fluctuations due to speculation, its volatility may pose difficulties. This unpredictability might make it less attractive for lenders.

Even with these obstacles, the analyst posits that if the United States creates a Strategic Bitcoin Reservation, this move would express faith in the cryptocurrency’s future prospects. Consequently, such a decision might foster wider market endorsement and propel Bitcoin towards a more prominent role within global financial systems.

Previously reported by U.Today, Neel Kashkari, President of the Minneapolis Federal Reserve Bank, considers Bitcoin to have limited practical application. On the other hand, Michael Saylor from MicroStrategy holds a contrasting opinion.

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2024-12-21 17:45