According to Foresight News, Gabor Gurbacs, a strategist at Tether and advisor at VanEck, has suggested that the Federal Reserve should consider purchasing Bitcoin instead of U.S. Treasuries. Gurbacs argues that the fundamental difference between the two assets lies in their supply: U.S. Treasuries can be printed indefinitely, whereas Bitcoin has a fixed supply. This makes Bitcoin a hard asset, similar to gold, which central banks traditionally hold to diversify their portfolios and hedge against inflation and currency fluctuations.
Gurbacs explains that the Federal Reserve's strategy of shifting from infinitely printable Treasuries to a fixed-supply asset like Bitcoin could serve as a diversification tactic. This approach would help the Fed protect itself from potential inflation and currency volatility. Currently, most central banks achieve this by holding gold. However, Bitcoin is increasingly being included in central bank investment portfolios as a hedge.
The idea is that by incorporating Bitcoin, central banks can enhance their asset holdings and mitigate risks associated with traditional fiat currencies. This strategy aligns with the broader trend of central banks seeking to diversify their reserves and reduce reliance on assets that can be subject to inflationary pressures. Bitcoin's fixed supply and decentralized nature make it an attractive option for this purpose.
