Saturday 17th August 2024.
During the Nashville BTC Conference that took place in July, Donald Trump addressed the audience and gave a rather flat speech. There were a few gems, but it was, as you would call it, rather Trumpian.
But it’s what happened at the end that will likely be remembered for a very long time.
Cynthia Lummis, a United States senator, announced the Bitcoin Reserve Bill, and the idea is simple.
The United States will establish a Bitcoin Strategic Reserve. A network of secure storage vaults across the US as well as purchase programs to ensure the management of bitcoin acquisition and holdings of the federal government with the intention, ultimately, to pay off all or most of their national debt.
As it stands, the US currently holds around 210,000 BTC valued at around $12.6 billion (for those in the UK, this amounts to around £9.8 billion), and they have a national debt figure of $35 trillion. But their intention is not to stop there. The whole point of this bill is to continue to acquire and hold bitcoin until the United States Federal Government holds at least 5% of the total bitcoin supply.
As a reminder, the Bitcoin network has a fixed supply of 21 million coins. Owning 5% of this supply equates to a little over 1 million coins.
That means the US must purchase another 800,000 bitcoin if the bill is approved and they hope to succeed.
Now you may be reading this and rightfully point out that there are a lot of ‘ifs’ in this situation, and you would be right. Donald Trump may not win the election, the United States may sell off some or all of its bitcoin holdings, and the prospect of the United States being one of the biggest bitcoin holders could be gone in an instant.
But wait.
There’s more.
When Donald Trump and Cynthia Lummis announced their intention to hold Bitcoin as a National Strategic Reserve Asset, they essentially sent out a message to the entire world that Bitcoin is being considered at the strategic level.
And for other nation’s across the world, that’s a big deal. Nation states compete at the very highest level imaginable, and if a competitor announces they are considering holding bitcoin in the long run to pay down their national debt, other countries, particularly adversarial ones, have no choice but to listen.
And this has consequences. It is now circulating that Russia, a member of BRICS, has approved, or is in the process of, approving cryptocurrency for international payments and trade.
And they won’t be the only one.
So, without going too far down the geopolitical game theory, there is really only one thing you need to take away from this very short but concise post.
The US is 35 trillion dollars in debt.
And they want to hold Bitcoin in secure vaults across the country with the intention of paying down most if not all of that debt.
And if it’s good enough for them.
It’s good enough for you.
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