As a seasoned researcher and investor with over two decades of experience in the financial markets, I have seen governments intervene in various asset classes with mixed results. The idea of creating a Bitcoin (BTC) strategic reserve might seem attractive to some, but it is a slippery slope that could lead to unintended consequences.
Creating Bitcoin (BTC) strategic reserve might look attractive for Bitcoiners, seasoned researcher and investor Jim Bianco admits. However, once created, it will allow the government to gain too much control over Bitcoin’s (BTC) price performance.
Too much power: Bitcoin (BTC) in strategic reserve is bad idea, Jim Bianco says
As an analyst, I’ve been considering the implications of a strategic Bitcoin (BTC) reserve within the U.S., a notion that seems to resonate strongly within the Bitcoin community. However, my analysis suggests a different perspective. Rather than fostering increased interest rates for BTC, such a move could potentially give the government an excessive amount of control over the Bitcoin price in the long term. This could lead to potential manipulation and loss of market decentralization, core principles that underpin the digital currency’s value proposition.
This is why the #Bitcoin Strategic Reserve is a bad idea, according to @biancoresearch
— David Lin (@davidlin_TV) August 5, 2024
Macro economist Jim Bianco, president of Bianco Research, conveyed this warning during his interview with David Lin, host of The David Lin Report.
Bitcoin (BTC) owners who deal in retail won’t have insight into the specific plan guiding the government’s Bitcoin journey. Instead, they’ll encounter the repercussions of a bitcoin market influenced by government control, namely unpredictable price fluctuations.
Each time a government intervenes in such matters, they impose regulations. They aim to determine the fair market value for Bitcoin, selling it if they believe it’s overpriced and buying it when they think it’s underpriced. Additionally, they have the authority to control ownership rights of Bitcoin.
Based on his findings, Bianco suggests that storing Bitcoin (BTC) in the strategic reserve may cause more problems than benefits instead.
During the Bitcoin Conference 2024 held in Nashville, Tennessee, Senator Cynthia Lummis, a supporter of cryptocurrency, announced the potential establishment of a strategic BTC reserve. This information was previously reported by U.Today.
To initiate this plan, Senator Lummis proposes the purchase of approximately 1 million Bitcoins (BTC), translating to around $60 billion in value.
Hong Kong also considers creating BTC strategic reserves
By 2024, an increasing number of nations are contemplating the adoption of Bitcoin (BTC) within their strategic reserves due to its potential ability to help tackle inflation concerns.
In addition to the ongoing Bitcoin (BTC) story in El Salvador, there are plans under consideration in Hong Kong, a major global fintech center, to assign a reserve status to the largest cryptocurrency.
Previously, ex-President Trump delivered remarks at the U.S. Bitcoin Assembly, expressing his opinions on Bitcoin. Notably, Bitcoin and Web3 technology are currently garnering international interest and growth, and Hong Kong is working diligently to foster innovation in this area as well.
— Johnny Ng 吴杰庄 (@Johnny_nkc) July 28, 2024
According to Johnny Ng, a member of Hong Kong’s parliament, as more nations embrace “digital gold,” it is increasingly possible for various countries to include this digital asset in their national reserves.
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2024-08-06 17:58