r/CryptoCurrency • u/WineMakerBg Make Wine, Take Profits • Jan 28 '25

GENERAL-NEWS Latest Proposal• US Gov to Buy 200,000 BTC annually for 5 years • Hold for at least 20 years • Goal: Halve the U.S. national debt in 20 years

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u/8A8 🟩 0 / 0 🦠 Jan 28 '25 edited Jan 28 '25

The lopsided pro/con to this is worth the play. If Bitcoin fails, a $100B loss is literally 20% of what the US just announced with the AI bill. Its the equivalent of a single Ukraine aid bill. (and this is considering a 100% loss on BTC)

If BTC prevails, that $100B could turn into $5T of pristine collateral. even if there is a 5-10% chance of that success, its positive EV.

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u/Ngc2273 🟦 0 / 0 🦠 Jan 28 '25

People need to think about this a little bit more. What does the world look like where BTC has "prevailed"? 1. Who will the US be selling that amount of BTC to, to get that much value without crashing it? 2. If there are countries that are demanding and transacting in Bitcoin in that scenario, (which is what would've given BTC that much value), it means we would have long shifted away from the USD as the reserve. It would've been already devalued completely. Paying off that USD debt in that situation would be completely irrelevant amongst other things.

A lot of the political blabbering is just to make personal unregulated portfolios go up, with no long term coherently thought out plan that actually benefits the people.

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u/Deep_Researcher4 🟩 0 / 0 🦠 Jan 28 '25

Don't think about it too hard; it's a pump and dump scheme. Trump doesn't give a shit what happens 20 years from now.

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u/CHUBBYninja32 🟦 0 / 0 🦠 Jan 29 '25

If there was any leak that the USA is selling some of its coin, the market would fucking tumble trying to get out ahead. Doesn’t make any sense.

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u/8A8 🟩 0 / 0 🦠 Jan 29 '25

Imagine if the US announced they were liquidating their gold reserves. You do not believe the price of gold would tumble?

Imagine if the US announced they are removing regulations regarding drilling for oil, and are dissolving their oil reserves - the price of oil would tumble as well.

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u/georgetonorge 🟦 35 / 35 🦐 Jan 29 '25

Pretty sure that’s exactly what they’re saying

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u/8A8 🟩 0 / 0 🦠 Jan 29 '25

Exactly, no sane person would state that the price of Bitcoin would be fine if the US sold some of their reserve - that's how markets work.

I am saying that this is no reason to dismiss the entire venture entirely. Because thats how all assets work.

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u/hunkydorey_ca 🟦 0 / 0 🦠 Jan 28 '25

Exactly, also the conversion to today's standards of cost of living may not be the same if inflation is equal to Zimbabwe in 2007. If you are investing in something else (like BTC) what's going to happen to the USD if no one invests in it.

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u/8A8 🟩 0 / 0 🦠 Jan 28 '25

Its important to distance yourself from the idea that utilizing an asset is akin to needing to sell it. Bitcoin, as I laid out, is pristine collateral.

A nation state would be in a position to borrow against their Bitcoin, without needing to touch it. Just like many entities currently do with their existing Bitcoin stockpiles.

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u/Ngc2273 🟦 0 / 0 🦠 Jan 28 '25

My man you sound like one of those NFT promoters. Stop with that stuff. Bitcoin is not a painting. It's not a consumable commodity. It's not an aesthetic. You need to sell it at some point.

Anyways, even the situation you're describing does not protect you from exchanging Bitcoins. When you're unable to return what you borrowed then your "pristine" collateral belongs to the counterparty, you will have to give it up.

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u/wurzelbrunft 🟩 5 / 5 🦐 Jan 29 '25

So the idea is to make debt by borrowing against Bitcoin to pay back debt? 🤔

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u/8A8 🟩 0 / 0 🦠 Jan 29 '25

Thats sort of how the entire US economy works. The US creates debt to push growth, in order to pay back debt.

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u/HSuke 🟩 0 / 0 🦠 Jan 28 '25

Cool. So now we're options trading US debt on crypto?

Sounds like something a gambling addict would do

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u/8A8 🟩 0 / 0 🦠 Jan 28 '25

It's a hedge? The US has strategic reserves in all kinds of commodities - oil, gold, etc. It makes sense in a world that is so quickly shifting from analog to digital, to embrace a stateless digital asset that is literally >10% of the market cap of gold.

You must understand that literally everything from a political decision perspective is a game theory EV play. From arms races and trade wars, to alliances and treaties. Everything involves risk, and its a matter of hedging that risk.

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u/HSuke 🟩 0 / 0 🦠 Jan 28 '25

Strategic reserves are all things we use:

Grain, gas, oil, helium, antibiotics, vaccines, antidotes, lithium, gold, potassium, noble gasses

Bitcoin doesn't really fit here as having utility.

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u/clownysf 🟦 76 / 76 🦐 Jan 28 '25

That’s still my main issue with a move like this. I don’t necessarily disagree with it but the lack of btc utility essentially makes this one large gamble.

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u/d8_thc 🟦 0 / 0 🦠 Jan 28 '25

nobody is using the US government gold and that is not at all why it's stockpiled...

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u/e_jey 🟩 0 / 0 🦠 Jan 28 '25

But you could actually use it. Someone could buy it and put it to actual use. The device you’re using has hold in it.

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u/8A8 🟩 0 / 0 🦠 Jan 29 '25 edited Jan 29 '25

Gold's industrial value is like 11% of its spot value currently. The argument for gold in this sense does not hold water.

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u/e_jey 🟩 0 / 0 🦠 Jan 29 '25

Take note the context of the conversation. At least the industrial use is even 11% of its spot value.

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u/Frogolocalypse 🟦 0 / 0 🦠 Jan 29 '25

States don't hold gold for its industrial utility, they hold it for its numismatic value. If it didn't have that numismatic value, it would be worth a fraction of its current price.

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u/e_jey 🟩 0 / 0 🦠 Jan 29 '25

My point is that at least it has some actual value. If everything went belly up right at this moment and what people needed was food then food would be worth more. At the end of the day Gold is peer pressure from the past. Everyone gave into the myth so here we are.

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u/Frogolocalypse 🟦 0 / 0 🦠 Jan 29 '25

actual value

It has value because people pay for it. As with all things. If you think bitcoin has no value, then try and acquire some for nothing.

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u/e_jey 🟩 0 / 0 🦠 Jan 30 '25

Yes people pay for it to use it. This isn’t semantics with me. I know I can buy something that doesn’t have value/utility to me other than feeling good for a few hours like alcohol.

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u/HelixTitan 🟦 0 / 0 🦠 Jan 28 '25

And if you think Bitcoin is a good hedging instrument, then you couldn't be more wrong. Stability is the name of the game for hedge strategies, there are way better options to do this exact same thing with, just not Bitcoin

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u/8A8 🟩 0 / 0 🦠 Jan 28 '25 edited Jan 29 '25

A hedge is literally just a contingency plan.

Was Michael Burry's bet not a hedge against the status quo? The US does not exist in a vacuum, contrary to most American's beliefs. This is global game theory playing out in real time. We are literally seeing other economic giants growing warm to Bitcoin by the second. Russia, China, and Middle Eastern countries are frothing at the mouth at the thought of a collapsing US dollar and an alternative.

In a world where sovereign nations adopt Bitcoin in their reserves, even in small amounts (and there is already precedent with smaller, more agile nations, like Bhutan, and El Salvador), it becomes a chain-reaction of capital that no-one wants to be left behind in.

The US, with a relatively modest amount in the grand scheme of their budget, gets their foot in the door as a hedge to all of this playing out.

Am I stating that this a guaranteed play and that these other nation states will act this way? no.

Am I stating that it would be naive to believe that it is an impossibility? Absolutely.

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u/HelixTitan 🟦 0 / 0 🦠 Jan 28 '25

"Hedging against the status quo" how to revel In one sentence you know nothing about hedges. Lmao

Hedging against the status quo is just called speculative investments ya dingus. Hedging is a proper financial term and has it's own accounting strategies it isn't just a contingency plan

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u/Party_Incident9382 🟩 0 / 0 🦠 Jan 28 '25

Come on man:

Digital Scarcity: Bitcoin, with its fixed supply, can be seen as a hedge against the infinite printing of fiat money in a world where digital assets are gaining more value. 2. Global Access: Crypto is resistant to censorship and isn’t confined to the constraints of a single government or banking system, making it a hedge against centralized control in an increasingly global and connected economy. 3. Innovation Hedge: The rapid evolution of digital technology means that traditional financial tools might become obsolete. Cryptocurrencies and blockchain technology could be the future backbone of financial systems, making early adoption a hedge against being left behind.

Just do a little critical thinking

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u/davand23 🟩 0 / 0 🦠 Jan 29 '25

"Do a little critical thinking" pastes a chatgpt response

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u/Party_Incident9382 🟩 0 / 0 🦠 Jan 29 '25

Do you feel GPT is not critical thinking? Why waste time trying to convince the closed minded?

Now that’s big brained stuff right thurrr

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u/penty 🟦 0 / 0 🦠 Jan 28 '25

Those reserves are specifically to keeping our economy going because they are consumable.

IMHO, I just don't see a need for the US to use BTC as a strategic reserve. Art has a great return, but we don't need an Art reserve.

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u/brainfreeze3 🟦 0 / 0 🦠 Jan 28 '25

nobody hedges on margin jfc

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u/Ok_Nefariousness9019 🟦 21 / 0 🦐 Jan 28 '25

One of us.. One of us.. One of us.

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u/Meme_Stock_Degen 🟩 0 / 0 🦠 Jan 28 '25

That’s the US gov I love baby. One of us!

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u/VoDoka 🟩 3K / 3K 🐢 Jan 28 '25 edited Jan 28 '25

lol, if they then put it all on red and win, they have $10T.

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u/penty 🟦 0 / 0 🦠 Jan 28 '25

Like they could wait 20 years, they'll pirate it ASAP.

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u/Counciltuckian 🟦 1 / 2 🦠 Jan 28 '25

What AI Bill? The AI investment announced is from private sector, been in the works for a while.

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u/fiddle_me_timbers 🟩 0 / 6K 🦠 Jan 28 '25

The $500 billion for the AI project is coming from private investment, not the government. Also, the data centers were already planned under a Biden EO. Trump literally just slapped 'The Stargate Project' on it and took credit.

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u/8A8 🟩 0 / 0 🦠 Jan 28 '25

I'm not stating anything other than a comparison of scale. On a nation-state scale, this Bitcoin reserve is not an unfathomable sum.

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u/zac79 🟦 0 / 0 🦠 Jan 29 '25

There’s a 0% chance of that success. This is just exit liquidity for the Bitcoin grifters. As soon as the government is done buying it, you’ll never hear the word Bitcoin again. 

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u/8A8 🟩 0 / 0 🦠 Jan 29 '25

!remindme 10 years

Its unfortunate that you feel that way.

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u/zac79 🟦 0 / 0 🦠 Jan 29 '25

Yeah… I’m the problem. 

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u/Feisty_Sherbert_3023 🟧 0 / 0 🦠 Jan 30 '25

Lolololol.

Dude. These are ponzi schemes.

Unregulated securities and wildcat banking. We did this 150 and years ago.

The usd is near a 34 year high and even El Salvador doesn't use it.

Their app uses usd to transact and displays it in btc.

It's all smoke a mirrors. That's why banks won't touch it. They'll only custody.

Don't fall for it. Almost time to sell. It's going to zero.

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u/8A8 🟩 0 / 0 🦠 Jan 30 '25

SAB121 was literally just rescinded and Jpow just talked on-air about bank adoption of BTC yesterday. I'm just here to provide you the information, after that, you're on your own. I can only lead the horse to water my friend.

“If you don't believe me or don't get it, I don't have time to try to convince you, sorry.” -Satoshi

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u/Feisty_Sherbert_3023 🟧 0 / 0 🦠 Jan 30 '25

Yeah. Do you understand what those mean?

Essentially nothing. It's a trusted 3rd party. It's no different than uphold etc.

It's allowing banks to crush the little guys.

The banks themselves aren't buying it. On the contrary they won't touch it.

JPow said the same thing.

Y'all don't even understand what you're talking about.

LOL Satoshi. If he were real he'd be pissed since the white paper is just a libertarian wet dream.

It's a ponzi scheme. I own more than you and you're going to get wrecked later this year.

Now I understand how religions form.

That's not how the monetary or banking system works.

There is no adoption anywhere. Give me one example?

We're in a liquidity crisis and when credit spreads blow up, crypto will go to zero. Y'all will look like idiots.

I'm a monetary economist, all this was and is predictable. You don't actually want to look at how the banking system works because you'd realize you believe in magic beans.

The madness of crowds. This time isn't different, and when people believe to the degree you do... They'll lose everything.

Zelle, fed now, UK faster money, swift-gpi, M-Pesa, etc. These are what are used all day every day globally. Not crypto.

These are cheaper and faster than crypto and already in use. What is crypto going to improve upon.

You're "investing " in a hash encrypted excel spreadsheets. These aren't valuable. They can be made for free.

It's a hype bubble just like AI, quantum, metaverse, etc.

The bubble that started in 1981 is ending. The dollar is soaring and y'all think we're in hyperinflation.

Won't end well. Your research is just random idiots who doesn't understand the monetary or financial system. The sickle is coming. It doesn't care what you or I think.

We went off the gold standard for a reason. Namely idiots hoard it and blow up the economy.

Might want to read up on the rail road bubble.

Same situation. I bet your information didn't include that...

People are dumb.

Don't be a sucker. I'm here to save your money. Sell when gold hits 3300 and wait for the crash. If it's real, buy it at the bottom. When you realize it's not... You still made money.

I'm not saying don't run the bubble, but it's a scam and always has been. Covid money gave people false hope. It's temporary. EVERYTHING is going to 2020 prices in the bust.

If you want to make money. Own us long bonds. They're going to the moon because it's the collateral the world runs on and idiots are trading it for over priced assets at the end of a bubble.

Cash is king. Us cash is the kingest.