Ultimate Money - Crypto News, Reviews & How to's
  • Home
  • About Us
  • Bitcoin
    Bitcoin Price Chart

    Bitcoin Price Chart

    Bitcoin Latest News

    Bitcoin Latest News

    what is bitcoin

    What is Bitcoin?

    How To Buy Bitcoin

    How To Buy Bitcoin

    Cryptocurrency ICO

    Bitcoin Wallets

  • Cryptocurrency
    Crypto Latest News

    Crypto Latest News

    Crypto Coin Reviews

    Crypto Coin Reviews

    Cryptocurrency Education

    Cryptocurrency Education

    Cryptocurrency ICO

    Cryptocurrency ICO

    Crypto Price Charts

  • Exchanges
    Top 10 Aus Exchanges

    Top 10 Aus Exchanges

    Top 10 Overseas Exchanges

    Top 10 Overseas Exchanges

    Coinspot Review

    Coinspot Review

    Binance Review

    Binance Review

    Bitmex Review

    Bitmex Review

  • How To
    What is Bitcoin?

    Get Started – Crypto Intro

    How To Buy Crypto

    How To Buy Crypto

    How To Store Crypto

    How To Store Crypto

    How To Mine Crypto

    How To Mine Crypto

    How To Bet With Crypto

    How To Bet With Crypto

  • Podcasts
  • Contact Us
No Result
View All Result
  • Home
  • About Us
  • Bitcoin
    Bitcoin Price Chart

    Bitcoin Price Chart

    Bitcoin Latest News

    Bitcoin Latest News

    what is bitcoin

    What is Bitcoin?

    How To Buy Bitcoin

    How To Buy Bitcoin

    Cryptocurrency ICO

    Bitcoin Wallets

  • Cryptocurrency
    Crypto Latest News

    Crypto Latest News

    Crypto Coin Reviews

    Crypto Coin Reviews

    Cryptocurrency Education

    Cryptocurrency Education

    Cryptocurrency ICO

    Cryptocurrency ICO

    Crypto Price Charts

  • Exchanges
    Top 10 Aus Exchanges

    Top 10 Aus Exchanges

    Top 10 Overseas Exchanges

    Top 10 Overseas Exchanges

    Coinspot Review

    Coinspot Review

    Binance Review

    Binance Review

    Bitmex Review

    Bitmex Review

  • How To
    What is Bitcoin?

    Get Started – Crypto Intro

    How To Buy Crypto

    How To Buy Crypto

    How To Store Crypto

    How To Store Crypto

    How To Mine Crypto

    How To Mine Crypto

    How To Bet With Crypto

    How To Bet With Crypto

  • Podcasts
  • Contact Us
No Result
View All Result
Ultimate Money - Crypto News, Reviews & How to's
No Result
View All Result

Will Governments Buy Bitcoin?

by Tim Delmastro
Will Governments Buy Bitcoin?
89
SHARES
Share on FacebookShare on Twitter

In May last year, a crackdown on organised crime by Bulgarian law enforcement resulted in the seizure of more than 200,000 Bitcoins. The arrests of 23 Bulgarian criminals led to the authorities confiscating the surprisingly large stash of Bitcoins. This raid on illegal activity in Bulgaria was momentous because, unlike the FBI and US Marshals who seized the Bitcoin held by the infamous Silk Road black market, the Bulgarian authorities did not sell the confiscated Bitcoins. 

At the time of the crackdown, the BTC seized by the authorities were worth around $2,300 each or approximately $460 million in total. However, with the steep increase in the price of Bitcoin in December, the dollar amount of Bitcoin confiscated had ballooned to over $4 billion. This huge number equated to around 25 percent of Bulgaria’s entire national debt!

Since then, Bitcoin prices have fallen substantially, and it’s unclear whether the Bulgarian authorities still have access to the private keys. But this seizure of Bitcoin was a significant event because it demonstrated the ability of an entire country to improve their balance sheet simply by holding Bitcoin. 

Trade wars

As President Trump’s trade wars continue to gather steam, the super powers of Russia, China and the US are in battle for global economic dominance. In recent years, both China and Russia have sold a significant portion of their US Treasury holdings, with Russia dumping a whopping 84 percent of their US debt in recent times. What’s interesting is that for several years both these nations have been undertaking an economic policy which involves the steady purchase and accumulation of physical gold. The largest holder of gold is still the US Treasury, but China and Russia now also own significant gold reserves. It appears the world’s superpowers don’t trust each other’s currencies or debt, but they all trust the value of gold. 

In the same way that gold is a form of money without borders, Bitcoin is also a borderless store of value. Many of the same properties such as scarcity and the non-existence of counterparty risk which attract central banks to gold are also present in Bitcoin. Therefore, it isn’t a stretch to assume that in the future, Bitcoin will also be hoarded along with gold as a form of central bank reserve.    

Before the majority of central banks consider holding Bitcoin as a diversification asset, they will most likely attempt to create their own national cryptocurrencies in competition with Bitcoin. But these national cryptos probably won’t be attractive to foreign governments, as they will not be open distributed blockchains. Instead, national cryptocurrencies will almost certainly be controlled by the issuing country, making it a centralised, digital coin which brings with it counterparty risk. Centralised cryptocurrencies with little or no mining can be hacked and 51 percent attacked, and perhaps only after this realisation by governments will they truly understand the decentralised nature of Bitcoin. 

Central bank involvement

The Bulgarian seizure has shown that Bitcoin can be used as a means of diversification and store of value. In the future, it may not be uncommon to see central banks allocate a small portion of their portfolio into Bitcoin as a hedge against currency and counterparty risk. Developing countries can use the Bulgarian example as a case study for how a country can potentially reduce or clear their national debt altogether by simply diversifying into Bitcoin as a long term play. It would certainly be interesting to see a smaller developing country rise to global prominence on the foresight of their leaders to allocate a small portion of their reserves into Bitcoin.    

Japan, the world’s third largest economy, has not taken any gold purchasing action. In fact, they’re the largest foreign holder of US government debt. This is most likely because the country has been heavily occupied by US forces since the end of the second world war. There is, however, a rumour circulating which suggests that the Bank of Japan may be purchasing large amounts of Bitcoin in secret as a way to hedge their US Treasury holdings. Bitcoin and precious metals are perhaps the only two counterparty-free assets in the world, so it would make sense that a major central bank such as the BOJ would consider secretly hoarding Bitcoin as a way to quietly diversify out of the US Dollar. It is a just a rumour, but one that certainly makes sense.    

In 1971, President Richard Nixon closed the gold window, the direct convertibility of foreign US Dollar holdings into gold, on the grounds of national security.

In the future, the realisation by governments on the power of Bitcoin as a counterparty free asset could lead to a digital arms race, where in the interest of national security, countries allocate a portion of their energy to the mining of Bitcoin. 

Tags: will governments buy bitcoin
Share36Tweet22
Previous Post

Blockchains and Freedom of Speech  

Next Post

Creating a brand new Cryptocurrency Ep#14

Tim Delmastro

Tim Delmastro

Tim Delmastro is a multi-award winning filmmaker and journalist, having researched and documented subjects relating to Bitcoin and other current events in finance for over a decade.

His films have been broadcast on Netflix, The History Channel, Al Jazeera, SBS Australia and Emirates In Flight. Tim has been a featured guest on Fox News, RT, The Project and several radio stations and podcasts.

Note: None of the information should be considered financial advice. We merely provide opinions and education so that you can Do Your Own Research. Cryptocurrencies have a history of volatility and Ultimate Money is not responsible for any financial losses or gains you may have when investing in any crypto coins or related projects.

Related Posts

Printing Money for Celebrity Endorsements
Bitcoin

Printing Money for Celebrity Endorsements

Can Governments Hoard and Destroy Bitcoin
Bitcoin

Can Governments Hoard and Destroy Bitcoin?

Turkey Turns Bitcoin Currency Crisis 
Bitcoin

Turkey Turns to Bitcoin During Currency Crisis 

Seriously, Is Bitcoin Dead?
Bitcoin

Seriously, Is Bitcoin Dead?

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

FOLLOW US

Youtube Twitter Facebook

ARTICLE POSTS

  • Bitcoin
  • Cryptocurrency
  • Exchanges
  • How To
  • Coin Reviews

WEEKLY NEWSLETTER

PODCAST SUBSCRIPTION

on Apple Podcastson Androidon Google Podcastson Stitchervia RSS
API Request timeout

TOP 10 CRYPTOCURRENCY

#

Name

Price

1 Hour

TOP ARTICLES

  • Bitcoin review
  • Buy Bitcoin with Credit Card
  • Bitcoin Mining Explained
  • Alice in Cryptoland
  • Ethereum Review

LATEST POSTS

Printing Money for Celebrity Endorsements

Printing Money for Celebrity Endorsements

Can Governments Hoard and Destroy Bitcoin

Can Governments Hoard and Destroy Bitcoin?

Turkey Turns Bitcoin Currency Crisis 

Turkey Turns to Bitcoin During Currency Crisis 

Ultimate Money Podcast Episode #015: Castlecoin Part 3

Interview with James Lynch, CEO of Castlecoin Ep#16

Seriously, Is Bitcoin Dead?

Seriously, Is Bitcoin Dead?

Ultimate Money Podcast Episode #015: Castlecoin Part 2

Behind the scenes of a Crypto Company Ep#15

What is a SIM Swap Attack? 

What is a SIM Swap Attack? 

TRENDING

  • Ethereum Review

    Ethereum Review

    0 shares
    Share 0 Tweet 0
  • Dash review

    0 shares
    Share 0 Tweet 0
  • NEM review

    0 shares
    Share 0 Tweet 0
  • Tezos coin review

    0 shares
    Share 0 Tweet 0
  • Top 10 Aus Exchanges

    139 shares
    Share 56 Tweet 35
Ultimate Money – Crypto News, Reviews & How to's

Ultimate Money is a Bitcoin and cryptocurrency education site providing guides, reviews, prices, podcasts and videos.

Article Posts

  • Bitcoin
  • Cryptocurrency
  • Exchanges
  • How To
  • Coin Reviews

Top Articles

Bitcoin review

Buy Bitcoin with Credit Card

Bitcoin Mining Explained

Alice in Cryptoland

Ethereum Review

RECENT NEWS

Printing Money for Celebrity Endorsements

Can Governments Hoard and Destroy Bitcoin?

Turkey Turns to Bitcoin During Currency Crisis 

Interview with James Lynch, CEO of Castlecoin Ep#16

Seriously, Is Bitcoin Dead?

Disclaimer: All contributors to the Ultimate Money website, related social media sites and other publishing platforms pride themselves on giving fair and balanced information on all aspects of the cryptocurrency industry. However it is very important to understand that we are NOT providing financial advice. Ultimate Money, it’s contributors and service providers are not Financial Advisors or Registered Analysts. We do not offer Bitcoin or crypto tips, strategies or trading models for you to copy. We merely provide opinions and education so that you can Do Your Own Research. Cryptocurrencies have a history of volatility and Ultimate Money is not responsible for any financial losses or gains you may have when investing in any crypto coins or related projects. Always use your best judgement when investing in any exchanges, wallets, CFD’s or other products.  Always be aware that any investment can go to zero.

  • About Us
  • Contact Us
  • Risks
  • Terms
  • Privacy

Copyright © 2018 All rights Reserved Ultimate Money

No Result
View All Result
  • Home
  • About Us
  • Bitcoin
    • Bitcoin Price Chart
    • Bitcoin Latest News
    • What is Bitcoin?
    • How To Buy Bitcoin
    • Bitcoin Wallets
  • Cryptocurrency
    • Crypto Latest News
    • Crypto Coin Reviews
    • Cryptocurrency Education
    • Cryptocurrency ICO
  • Exchanges
    • Top 10 Aus Exchanges
    • Top 10 Overseas Exchanges
    • Coinspot Review
    • Binance Review
    • Bitmex Review
  • How To
    • Get Started – Crypto Intro
    • How To Buy Crypto
    • How To Store Crypto
    • How To Mine Crypto
    • How To Bet With Crypto
  • Podcasts
  • Contact Us

© 2018 All Rights Reserved Ultimate Money.