Bitcoin - State FOMO Begins!

Will the world just stand still if the United States creates a strategic reserve of bitcoins?

State FOMO

The ambition stated by Republican senators to buy one million bitcoins is already having an impact around the world. Morocco, one of the few countries that banned bitcoin, has just lifted the ban.

Across the Atlantic, Brazilian lawmakers have just introduced a bill similar to that of American Senator Cynthia Lummis, aimed at creating a strategic reserve of bitcoins.

Deputy Eros Biondini suggests allocating up to 5% of Brazil’s foreign exchange reserves. This amounts to around 16 billion dollars (171,000 BTC). Brazil’s total foreign exchange reserves indeed stand at 330 billion dollars.

This unexpected pleasant surprise can be paralleled with the statements of the Brazilian president. Luiz Inácio Lula da Silva indeed called for the emergence of an alternative international currency to the dollar during his first state visit to China.

“I wonder every evening why all trade exchanges must be in dollars”, he remarked from the headquarters of the New Development Bank in Shanghai, also known as the BRICS Bank.

“Who decided that the dollar would be the international currency after the gold standard disappeared? Why can’t we trade based on our own currencies?”, he added.

Lula da Silva in China suggests ditching the dollar: “Every night I ask myself, why should every country have to be tied to the dollar for trade? Why can’t we trade in our own currency?…Today a country needs to run after dollars in order to export, when it could export in its… pic.twitter.com/6MU6brhyog

— Fiorella Isabel (@FiorellaIsabelM) April 14, 2023

The bill presents bitcoin as a “hedge against geopolitical risks”. This is a barely veiled reference to the freezing of Russian foreign reserves… If the West did not hesitate to confiscate 300 billion euros from the world’s leading nuclear power, no country is safe.

Stateless, non-confiscable, and existing in absolutely finite quantity, bitcoin has all the qualities to become the new international reserve currency that BRICS dreams of.

When will China change its stance? Our article on the subject: “Bitcoin – China against the wall”.

Bitcoin, the ultimate reserve currency

Brazil could soon join an exclusive club alongside El Salvador and Bhutan. El Salvador was the first to implement a bitcoin strategy. Its strategic reserve contains almost 6,000 BTC, representing nearly 540 million dollars.

The Kingdom of Bhutan is also accumulating bitcoin due to its surplus hydropower. Other governments hold much larger reserves thanks to judicial seizures:

United States: 208,109 BTC
China: 190,000 BTC
United Kingdom: 61,245 BTC
Ukraine: 46,351 BTC
Bhutan: 12,218 BTC
Venezuela: 240 BTC

It is worth noting that Germany recently shot itself in the foot by selling its 50,000 BTC at an average price of $57,900…

For more perspective, let’s remember that foreign exchange reserves held by all central banks amount to $12,347 billion. More than $6,600 billion, but also €2,265 billion. The rest is held in yen, pounds, Swiss francs, Canadian dollars, yuan, etc. The share of the dollar stands at 55% of the total official foreign exchange reserves. This is much lower than in 2001, when it reached 71%.

The share of the dollar would be even lower if gold reserves were included in the calculation. They represent over 20% of the grand total. Approximately 37,000 tons of gold worth $2,800 billion.

That’s a lot of money that should sooner or later end up in the bitcoin basket. In this scenario, the market capitalization of bitcoin would reach $17,000 billion. A single bitcoin would then be worth $800,000.

Not to mention the reserves held by individuals and companies. The latter already hold nearly 800,000 bitcoins. Microstrategy holds the lion’s share with 386,000 BTC in reserve.

In this regard, don’t miss our article: “Bitcoin is about to absorb a jackpot of 4,000 billion $”

The United States leads the way

The whole world will follow if the US Congress votes in favor of a strategic reserve of bitcoins. Senator Cynthia Lummis’s bill plans to divest gold reserves to hoard at least one million BTC (~ $95 billion).

“President Trump is rallying an army to fight for Bitcoin”, said the senator this Wednesday. Donald Trump promised at the Bitcoin conference in Nashville to keep “100% of the bitcoins that the US government already holds or will acquire”.

🇺🇸 US Senator Lummis calls for the US government to sell its gold and buy #Bitcoin pic.twitter.com/BlkK8y0sPW

— Bold Bitcoin (@BoldBitcoin) November 26, 2024

From hostile, the US government will become benevolent. The proof is that a dozen secretaries personally own bitcoins.

Such is the case with Vice President Vance and also the next Secretary of Commerce. Knowing that Howard Lutnik is the current CEO of Cantor Fitzgerald, which is closely collaborating with the Tether (Stablecoin) firm.

It should also be mentioned that Robert Kennedy is in the mix. The one who will oversee Health does not hide that he has placed most of his fortune in bitcoin. He recently declared on X:

“Bitcoin is the currency of freedom, a hedge against inflation for the American middle class, a remedy for the dollar’s decline as an international reserve currency, and a way out of a ruinous national debt”.

Washington is keen to take advantage of the appreciation of the only asset in the world existing in absolutely finite quantity to clean up its finances. It’s only a matter of time before the whole world realizes that bitcoin is a historic technological breakthrough.

Don’t miss our article: “Bitcoin – The geopolitical masterstroke of the United States”.