Topic: US national bitcoin reserve fund....? (Read 645 times)

Yes it's published content online, but this Bitcoin federal reserve fund isn't just sensationalist journalism, it's something Trump himself has discussed. I am bullish on it.

The US might be successful in that, but will other countries take the risk? Another thing that I also wonder is the negative implications of such an event; if it eventually does occur that strategic reserves for most countries are diverted to bitcoin, what will be next?

Easy price control and manipulation, where they can easily gang up and decide how they want the market to be reacting with little news of either selling or buying more, I'm just against this idea of government buying and holding a large percentage of Bitcoin all in the name of reserve. Their intentions are always biased; their buying news will bring bullishness to the market, but it's going to be temporary.

In the end, I think it's only newbies and OGs who still lack proper knowledge of the market will take such news as a financial advice, yeah, I appears bullish as fk but that's the purpose for the write up in the first place, to get your hopuim as up as possible.

I read stuffs like that and I simply smile, I enjoy reading them but I never allow that get into my head to influence my decision making.
Already, we who have been here for quite a long time should already know that Bitcoin's got a great future, so articles like this shouldnt come as a surprise to the extent of we getting too excited about it, for what will be will be, and bitcoin have come to be, the government and companies fighting over who's gonna hold the most bitcoins is their business, and also to my benefits because they will only be pumping my bag, so I just will sit down and watch 'em, one of the benefits and of investing in great innovations very early.

I support your idea. Bitcoin should not intersect with the state in any way. This is complete absurdity. If this happens, the government will become the largest owner of coins. And do you know what will happen then? These people in power will be able to dictate their own terms of the "game" to the crypto community. Ask yourself: "Do you need it?" That's what I'm talking about. This will all end badly. You'll see. You can't follow this scenario. It's dangerous.

What are you even saying? This is not related to this discussion in any way, I mean to my post you directly replied to. No one is saying the US is not investing in other countries' assets, just like @franky1 pointed to the country's investment in other countries' bonds, it is part of the QE (Quantitative Easing), a monetary policy to stimulate the economy. Diversification or not, are they not doing it in the traditional way they know? Is any of those investments in blockchain/decentralised systems?

I am pretty sure that investing in other nations is also a way of diversification as well, if your nation does badly, while others do fine, then you get to make money from the other ones who are doing fine and you are not going that bad.

Why do you think most nations have dollars in their reserves? Because they trust that USA will do fine, at worst case, whenever they do too badly, they just go into a war, get resources of another poor nation, and make a lot of profit form it. Look at Iraq, they got back form there a lot richer, not in military sense, tax payers paid a lot, but the private companies made a killing there, literally, and then the growth of the nation was much bigger for a long time. If we look at El Salvador, we can see that they do have a reserve and they are doing pretty alright for their situation and I believe we can make a profit based on whatever we can see from there. USA could do the same, for a lot more money and could be richer.

Only time will tell how it goes for real.
It may go as EarnOnVictor said, or it may be the other way around.
But I think it would still be beneficial for the whole sentiment.
The question is how far Trump and the team would go to make something out of this whole situation.

You are right about the US government investing in other nations' bonds and even more, but we should not ignore the fact that these are centralised systems. They have the political power and economic rights for the countries to fulfil their obligations to them. This may not be a direct control but still the traditional way. Can we say the same about Bitcoin? The US will continue to tread carefully.

Again, the x% reserve you mentioned for another asset, is it not the same as depleting their reserve to buy another asset they will keep? Is that not reserving through another asset (Bitcoin)?

not 'as a reserve'.. but instead invest x% of the reserve in other assets.. US gov already invests in other assets they dont control, such as other nations bonds, other nations natural resources

Thank you for bringing this up, at a point, I thought I was the only one who sees things beyond the selfish outlook of people, especially those outlooks that are not just feasible.

First, how possible is it for a country like the US to accept a decentralised asset as a reserve? The US I know likes to associate with what they can control, but unfortunately, Bitcoin is not one of them. Even Trump who has heated the space can't unilaterally do that, it must pass through enough political debates and Congress must pass it first, which I know will die on arrival because such a view is not a kind that aligns with the US vision. I wonder what will continue to happen to the USD if other countries follow the path (which I know they will). The US is smarter than that!

ok lets play it out as if the 2025 BIS rules were implemented in 2023(btc price ~$25k/btc)

so US fed reserve has $250bill in reserves and allowed upto 5% of instable crypto(btc)
so thats $12.5bill allowed as btc, meaning they could have bought/obtained 500,000btc

this would mean to not breach the BIS limits:
by march 2023 they would need to sell some
so imagine they dropped 100,000k to allow a buffer for the price to get to $31,250 before needing to act again
by october 2023 they would need to sell some
so imagine they dropped 100,000k to allow a buffer for the price to get to $41,666 before needing to act again
by december 2023 they would need to sell some
so imagine they dropped 100,000k to allow a buffer for the price to get to $62,500 before needing to act again

so that alone would have been a 1 year buy up and drop of 500k btc -> 200k btc, where there would be 3 sell offs within that year of a large lump

but on the flip side, the gov is redistributing the coin and holding less coin as the price increases

and if played out to now where price is $90k/btc. the us fed reserve would only be allowed 125k btc to allow a $100k price buffer

 

Maybe more better for US government not to rush their decision to make bitcoin as their global reserve. They should study every possibilities at least 1 year then consult their plan to many concern institution or people so that they can get right inputs that can help make their reserve plan to became more effective.

Since if they rush just like that and use the tax payers money then maybe they might encounter a lot of problems especially if they see a massive correction which is a normal occurrence on bitcoin.

Its really a great plan but we also need to consider the implication of their plans since if they didn't get it right then maybe the government will hate bitcoin if they didn't get what they expect from it. Proper planning is important to make everything work according to what they like to happen.

I don't think it's entirely BS per se-- I just feel even if it's happening, it may not be just about the same proportion in this article or anywhere else...

I dunno who TF Satoshi was, but his/their intentions aren't as concealed as his/their identity is... There's a possibility that the new revolutionary store in value would bid a higher price than this one.
I don't know for a fact if the US government would certainly get 5% as this might just be a disclaimer (correct me if I'm wrong), but I do know that everyone else would certainly follow suit.
This is just gonna get the whole thing fucked!!! Volatility is one open but secret rule that has kept Bitcoin above every damned currency.
The moment this becomes a political affair and is weaponized against another county's economy, with alot of politically affiliated rules, it's gonna FAIL!
Bitcoin = freedom!

Yes, you are right or it is not right for the government to enter any business on its own it will not be right because when the government finds a system to invest in its own business then it will be for itself. The government of a country never has a chance to look at itself alone because its work is about the country and the people of the country. The government will always see everything that is beneficial to its country as a profit for its investment this is right but it will not be right for it to invest alone in any business field.

Despite having funds they are not able to invest because they haven't been able to trust BTC till now. If they had understood that there is trust in BTC then maybe they would not have kept their funds like this they would have invested them. Maybe they are waiting for something more positive towards BTC if they see something more positive about Bitcoin then maybe they can be expected to move towards investment.

I just saw this link from a post on CMC, and I swear I hope April Fools' Day has come twice this year, because using taxpayers' dollars to fund bitcoin purchases is just downright irresponsible on the government's part.  Trump might be pro-bitcoin and that's great and all, but what would happen if his administration set a fixed price for it, much like gold many years ago when it was worth exactly $20/Oz? 

Think that couldn't happen?  All of you people saying this is a great plan better put on your critical thinking caps or at least realize that bitcoin and governments should not mix.  I'm not saying there shouldn't ever be any regulations or the like, but as far as a superpower country owning a lot of bitcoin....what could go wrong?

Eventually, it’s what El-Salvador have been doing in a couple of years now and it’s been very controversial, haven’t raised some issues of its own especially during the down times when Bitcoin was bearish. The difference here could be that, the El-Salvadorans used it as legal tender which would be opposed to what US government would be proposing.
Using it for some reserve and that’ll be investment to use in settling whatever debt and rescue the economy maybe.

I read somewhere here, how this can not work and yeah, it goes against everything Bitcoin stands for. Bitcoin wasn’t created for the purpose of having to rescue economies but to enable p2p transactions and as such, having to view it for a honeypot where they just invest with the intent of taking profit in a decade or 2 decades to save an economy they severe by perpetual borrowing and not enough revenue generation doesn’t work.

The US owes at least a budget deficit of $2 trillion annually according to the article above and Bitcoin’s market cap is only about $1.79 trillion in 15 years. How could that be rescuing the later. It’s as risky as proposed I would say. Government don’t have to underscore the process of revenue generation within its nation state and they would do fine not viewing Bitcoin for some economy rescuer. US is a large economy!

The US senator lead by Senator Cynthia Lummis is working this to happen this is interesting article explain about it https://dig.watch/updates/us-senate-plans-bitcoin-reserve-under-trump also this one https://cryptobriefing.com/strategic-bitcoin-reserve-us/

So if they can pass that law and Trump will sign it which possibly it might really happen then imagine another huge impact it can give to bitcoin.

Provably they will not put everything in bitcoin, but rather they would just separate some funds to use for their investment. I guess they provably do some study with this since for sure they have lots of economic advisers working for them. So lets just see if their decision to make bitcoin as their global reserve would really bring something great for their country.

Maybe other country can afford to risk now or they are still skeptical that's why they are still away and not thinking about bitcoin for now. But for sure everything will follow in future if there's more positive effect it can bring to the country adopt it.

It is beyond insane to believe that you will repay all the debt by buying and selling bitcoin. Let's run some numbers.

- Bitcoin market cap: $1.8T.
- US debt: $36T.

This means that to repay the debt, Bitcoin would have to do a 20x and, somehow, the US government would end up with all the bitcoin, and find a seller (country states) to exchange it for their debt. Such a scenario would also entail completely dismantling the Federal Reserve, which, realistically speaking, is just impossible.

And they don't have $36T to buy all the bitcoin to begin with. That's the reason they're $36T in debt.  

The artice, in my opinion, writes the obvious.
The U.S will eventually buy Bitcoin officially. This is de-facto.
Now, whether they will use it to repay debt, yeah, this is risky, unless they have a long repayment horizon. Like really long...
The real question is... Will the U.S decide to transition to a bitcoin standard, from the current FIAT standard?

The difference between the two actions is unimaginably great.

Buying Bitcoin at a national level would:
1. Increase bitcoin's exchange price.
2. Give a general financial signal that the U.S (one of the strongest economies) trust Bitcoin.

Transitioning to a Bitcoin standard would essentially change the world... I can't even describe the changes in a post.

I hope my point was clearly made.

Yeah, it wasn't Peter who have thought of this idea first. I'm not sure if a politician has already put forward such a proposal, but this possibility has already been discussed before, at least the part that the Social Security fund be used to buy Bitcoin.

I'm partly of the idea that government shouldn't enter into the business of investing. Every penny that the government has should be spent. Whatever the government has should be used to serve and invest in its people. It isn't their business to make money. It's their business to look after the welfare of the people.

However, many countries have investment funds, sovereign funds, wealth funds, or whatever you call it. If they have such, why can't they indeed invest in Bitcoin?

Whatever Bitcoin stands for doesn't matter, does it? After all, it doesn't have a mechanism that prevents the government from investing into it.