Key Takeaways:
- Bitcoin as Strategic Reserve: Senator Cynthia Lummis proposes converting part of the U.S.’s 8,000+ tons of gold reserves into Bitcoin to establish a 1 million BTC reserve.
- Economic Justifications: The move aims to address inflation and national debt while keeping the U.S. Treasury’s balance sheet neutral.
- Mixed Reactions: Critics question feasibility, but proponents highlight long-term benefits, including potential Bitcoin price surges to $500,000 per BTC.
Wyoming Senator Cynthia Lummis has proposed that the U.S. Treasury convert a portion of its gold reserves into Bitcoin, establishing a strategic Bitcoin reserve.
The U.S. currently holds over 8,000 tons of gold, and Lummis suggests that converting gold certificates to Bitcoin could maintain balance sheet neutrality while avoiding the need to spend an estimated $90 billion to purchase Bitcoin outright.
An ally of Donald Trump in the Senate has a plan for filling up the president-elect’s proposed strategic Bitcoin stockpile without adding to the government deficit: Sell off some of the Fed’s gold. https://t.co/x8VzGDUJOE
— Bloomberg (@business) November 14, 2024
She emphasizes the urgency of this move as a response to rising inflation and national debt.
Lummis introduced the Strategic Bitcoin Reserve bill in the Senate, aiming to secure 1 million Bitcoin—about 5% of its total supply—for 20 years.
Critics question the feasibility of the plan, but proponents argue that the long-term benefits, such as Bitcoin’s potential as a hedge against economic instability, outweigh the initial costs.
Investor Anthony Pompliano highlighted that the estimated $90 billion cost is minimal compared to recent government expenditures like an $850 billion increase in national debt over three months.
Skepticism remains, with figures like Galaxy Digital CEO Mike Novogratz doubting the plan’s viability, though he noted it could significantly increase Bitcoin’s value.
Lummis’ proposal reflects a broader trend of lawmakers and investors considering Bitcoin as a safeguard against economic uncertainty.
About The Author
Adam Morris, the co-founder of Crypto Head and a respected crypto expert, offers insightful commentary and analysis on cryptocurrency, NFTs, and the evolving digital landscape.
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