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Rumors are swirling that the US government prepares for a major Bitcoin move and could invest up to $100 billion. It may sound like a bold idea, but Sebastian Bea, president of Coinbase Asset Management, claims it’s not as far away as it looks.
In a recent interview, Bee explained how small accounting changes can unlock enough value for the government to invest in Bitcoin.
Gold revaluation could unlock Bitcoin’s $100 billion
Currently, US gold reserves are still listed at 1973 price of $42.22 per ounce, but are currently trading at over $3,300 per ounce. This inconsistency leaves a nearly $900 billion gap between gold’s book value and its actual market value. Bea suggests that a simple update to the law to reflect the true value of gold could open the door to great economic benefits.
How Bitcoin fits into your plan
The key to doing this is to amend 31USC §5117. This allows the US Treasury to issue a more valuable gold certificate. This allows capital to effectively create sovereign wealth funds that will be used to purchase Bitcoin. Bea’s strategy is consistent with Sen. Cynthia Ramis’ Bitcoin Act, which calls for the US Treasury to buy 1 million Bitcoin over five years.
The meaning of such a movement is large. Buying 5.5% of Bitcoin’s market capitalization could send a shockwave through the global market, with other governments likely following along as they appear to be trying to stay competitive in the digital world more and more.
Will it happen soon?
Bea has not set a specific timeline, but has suggested that the US could make this move soon in 2025 if the political momentum is right. With Bitcoin currently hovering around $94,000, a US investment of this magnitude will bring cryptocurrency prices even higher and set the stage for a new era of nation-state adoption of Bitcoin.
The road to US Bitcoin Reserve may be shorter than we think, especially if Congress decides to make small but powerful legislative changes. Potential impact? A massive new chapter for Bitcoin and its place in the world economy.
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FAQ
The US government can invest in Bitcoin by reevaluating its gold reserves, which will unlock important capital. This method avoids the need to print new money or increase your debt.
Similar to the way central banks increased their gold purchases last year, other governments could follow the US lead in investing in Bitcoin to stay competitive in the digital-first economy.
A strategic Bitcoin reserve refers to the large accumulation of Bitcoin by a government or institution, and is treated as a reserve asset similar to gold or foreign currency. It can be used to stabilize the economy or to strengthen the financial security of the nation.
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