Why Bitcoin As A Strategic Asset May Cause More Harm Than Good
- PHPzOriginal
- 2024-08-07 09:06:31416browse
Donald Trump, former president and the current Republican nominee for this year's presidential election, sparked discussion in the crypto industry last month
Former President Donald Trump announced plans to make Bitcoin a strategic reserve asset for the United States during a speech at the Bitcoin Conference in Nashville last month. While this may seem like a good idea to some people, Bianco Research president and former Wall Street analyst Jim Bianco believes it could end up harming the core tenets that made Bitcoin appealing in the first place.
"This is why the #Bitcoin Strategic Reserve is a bad idea," Bianco tweeted on Monday.
According to Bianco, Trump's plan would lead to more overt governmental oversight and control over the Bitcoin price in the long term. In an interview with journalist David Lin, Bianco noted that retail investors will not know the government’s exact Bitcoin strategy. They will instead be forced to deal with the consequences of government-controlled Bitcoin ( BTC ) prices.
"Every time a government steps in and does something like this, they put rules on it. They’re going to decide what is the appropriate price for Bitcoin and they’re going to sell it when it’s too high, they’re going to buy it when it’s too low, they gonna decide who owns it."
Senator Cynthia Lummis, a prominent crypto industry advocate, on July 31 formally introduced the Bitcoin Reserve bill to the U.S. Senate. The bill aims to create a national reserve of Bitcoin and position the US as a global leader in the adoption and secure management of the world’s oldest and largest crypto by market capitalization. Lummis's proposal includes lofty goals, such as accumulating 1 million BTC — which is roughly 5% of the total Bitcoin supply. The bill proposes using existing US Treasury funds to buy Bitcoin, akin to the Treasury’s gold allocation.
A Hong Kong lawmaker has also called on the region to consider including Bitcoin in its strategic financial reserves amid growing global recognition of BTC, frequently called “digital gold”, due to its potential as a hedge against runaway inflation.
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