A Response to the Strategic Bitcoin Reserve Signed by President Trump

A Response to the Strategic Bitcoin Reserve Signed by President Trump - 

It is remarkable that in the economically largest and most powerful country in the world a presidential decree is issued to create a strategic reserve in an intrinsically scarce asset class with a history of less than 20 years.

- It would be a logical consequence that other countries, who do not have the luxury of the world reserve currency, at least think for a moment about what to do with it and whether it is appropriate to create such a reserve as well.

- Bitcoin aficionados who claim that the United States is going to sell gold are completely wrong. 

In the explanation of the decree, Bitcoin is described as ‘digital gold.’ It would be quite bizarre if Trump were to trade one ‘store of value’ (with a 5,000-year status) for another. 

Moreover, it does not fit in with Trump's intention to verify the gold reserves at Fort Knox and, at least as importantly, it would allow countries like China to buy even more gold to break away from the US dollar.

The Departments of Finance and Commerce are authorized to develop budget-neutral strategies for acquiring additional bitcoin.

As long as this does not lead to (additional) costs for American taxpayers. 

This phrase can be interpreted in several ways. 

Because what is budget-neutral? The signal here seems to be that there will not be immediate mass purchases and that this decision is central in the first instance. 

In my opinion, purchases are therefore possible. In conclusion The announcement of an American strategic Bitcoin reserve is, if you look at it from a distance, big news. 

Who would have expected this two years ago? And although Trump always takes the importance of the US and the dollar as a starting point, it is remarkable that an asset with such a short history has a role in this.

At least as important: it forces companies, politicians and, last but not least, investors to think about this 'asset.' How do asset managers explain to their clients that they refuse to even look at Bitcoin? 

By continuing to repeat like a dinosaur that Bitcoin is for criminals? Well, now you know that if those Bitcoins are confiscated, they will end up in a strategic reserve in the US.

It is not in the interest of the customer to continue to ignore Bitcoin, to the extent that you should do that anyway in a world dominated by only two asset classes: stocks and bonds. 

And will European ‘leaders’ now also look the other way? That has worked out really fantastically with defense, energy and war, hasn’t it?

In short, my conclusion is mainly that this should work as an eye opener! As Draghi recently said 'Do something!