Does the United States want to build a bitcoin reserve? Bloomberg: This will be the biggest cryptocurrency scam to date.

Does the U.S. government need a strategic reserve dedicated to storing bitcoin?

In the opinion of Bloomberg editorial board, this idea looks more like the biggest cryptocurrency scam to date.

Since Trump won the election, Bitcoin has risen by more than 50% and the price has exceeded $100,000, partly because cryptocurrency supporters-who donated about $135 million to Trump and members of Congress-hope to persuade Trump to establish a bitcoin reserve.

Trump himself has a positive attitude. According to the information disclosed at present, Trump's bitcoin reserve plan currently only involves bitcoins that have been confiscated by the government (about 200,000 pieces, with a total value of about 20 billion US dollars), but some members of Congress hope to go further. According to the bill proposed by Republican Senator Cynthia Loomis, the US government will buy another 1 million bitcoins within five years and hold these reserves for at least 20 years.

In Bloomberg's view, it is completely unnecessary to set up a strategic reserve of Bitcoin.

Yes, the U.S. government has several strategic reserves (such as oil reserves) to ensure the supply of commodities that are vital to economic or national security. But bitcoin has no industrial use, no actual cash flow and no connection with the real economy. It is just a purely speculative tool. Its price depends entirely on how much a more stupid person is willing to pay.

In addition to wasting taxpayers' money, creating bitcoin reserves will only enrich existing bitcoin owners. Considering that only a small number of bitcoins are currently circulating in the market, the purchase of 1 million bitcoins will quickly increase the price of bitcoins (the total number of bitcoins is only 20 million), and drive investors to buy crazily and grab the position before the US government.

The US government will become the "more stupid person" in the market. Considering that the purchase cost may be as high as hundreds of billions of dollars, financing seems inevitable. But no matter which way, the cost is bound to be high: if you borrow through the Ministry of Finance, it will further increase the national debt and interest costs; If money is printed through the Federal Reserve, it will lead to inflation and weaken people's confidence in the dollar.

In return, the U.S. government will get a bunch of tokens that don't generate any interest or dividends.

In Bloomberg's view, the argument advocated by cryptocurrency supporters that the US government can sell profits to repay debts when Bitcoin appreciates is also untenable. Bitcoin is highly volatile and lacks basic value, so the risk of loss is high. The purchase of bitcoin reserves itself is mandatory, which will lead to the final worthless bitcoin reserves in the hands of the US government.

To make matters worse, with the rising price of Bitcoin and the endorsement of the government, Bitcoin may have great attraction to banks and other financial institutions. If the regulator allows, banks can lend dollars with digital tokens as collateral, so that holders can convert encrypted wealth into real money. If these collateral lose significant value, the next financial crisis is not impossible.

Ironically, Bitcoin is essentially an anarchist project that allows people to trade without relying on a central intermediary or government. In reality, centralized intermediaries that have dominated transactions, such as Coinbase, a cryptocurrency exchange, are lobbying the government to provide support similar to large-scale subsidies.

Risk warning and exemption clause

The market is risky and investment needs to be cautious. This paper does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situation or needs of individual users. Users should consider whether any opinions, viewpoints or conclusions in this article are in line with their specific situation. Invest accordingly at your own risk.