Source: Bloomberg Editorial Board, December 9, 2024
The idea of a US government strategic Bitcoin reserve, reportedly being considered by President-elect Donald Trump, is under scrutiny as critics argue it could end up being the largest crypto scam to date.
Context
Bitcoin’s value has surged over 50% since November 4, surpassing $100,000. This rapid rise is partially attributed to the belief that Trump, who has received over $135 million in donations from crypto advocates, might establish a Bitcoin reserve during his presidency. The concept has raised significant concerns among experts and policymakers.
Key Arguments Against a Bitcoin Reserve
1. Enrichment of Current Holders
• A government purchase of Bitcoin would primarily benefit existing holders, inflating prices even further and transferring public funds to private investors.
• Critics view this as a misuse of taxpayer money for private gain.
2. Volatility Risks
• Bitcoin’s notorious price volatility makes it an unreliable asset for a strategic reserve.
• Its value can plummet as quickly as it rises, exposing public finances to unnecessary risk.
3. Lack of Practical Use
• Unlike traditional reserves like oil or gold, Bitcoin lacks inherent value or practical applications in emergencies.
• Its primary appeal lies in speculative investment, which doesn’t align with the purpose of a strategic reserve.
4. Potential for Mismanagement
• Establishing a Bitcoin reserve could open doors to corruption, mismanagement, and lobbying by crypto stakeholders seeking personal gains.
Political and Financial Dynamics
• Crypto Influence in Politics: Donations from crypto proponents have played a significant role in the recent elections, with $135 million reportedly funneled to Trump and congressional campaigns. This influence has raised concerns about undue industry sway over policymaking.
• Public Sentiment: While crypto has gained popularity among certain segments of the population, many remain skeptical about its long-term stability and role in the economy.
Conclusion
The Editorial Board concludes that creating a Bitcoin reserve would be a misuse of taxpayer money and could destabilize public finances. Instead of benefiting the public, such a move would disproportionately enrich current Bitcoin holders and invite risks of corruption. The proposal raises fundamental questions about government priorities and the ethical use of public resources.
News Source:bloomberg，This article does not represent our position.
