Asset manager and investor Anthony Pompliano recently stated that a 'global Bitcoin arms race' among sovereign nations and governments has officially begun.
In a conversation with Yahoo Finance, Pompliano emphasized that the market is expecting President-elect Donald Trump to fulfill his campaign promise of establishing a strategic Bitcoin reserve fund.
According to Pompliano, this decision would serve the national interest, helping the U.S. not to be 'left behind' in the global competition for this asset.
Pompliano states: "Currently, we are witnessing a global race for Bitcoin. Whether you are an official at the local, state, or federal level, it is important to find ways to add as much Bitcoin to the balance sheet as possible. This is completely different from gold, as Bitcoin cannot be mined further from the ground."
Pompliano explains that the race to adopt Bitcoin mainly stems from issues of inflation and the devaluation of local currencies. Pompliano points out that in the last five years, the purchasing power of U.S. residents has decreased by about 25%.
Pompliano notes that countries like Bhutan and El Salvador have accumulated Bitcoin and are taking advantage of being small nations with less risk of financial devaluation compared to powers like the U.S.
However, Pompliano believes that the risks for the U.S. when investing in Bitcoin remain relatively low, despite the economic dominance of the country.
"The national debt has increased by an additional $850 billion just in the last 90 days. If we decide to move this amount into Bitcoin, it would be equivalent to about half of the current market capitalization of Bitcoin. We're talking about an investment from $50 billion to $100 billion, a figure that is insignificant compared to total government spending. And I believe the rewards from this move will fully justify that level of risk."
This model is not only being adopted by countries, but is also starting to appear within the United States itself. Jimmy Patronis, the Chief Financial Officer of Florida, has pushed for a portion of the state’s pension fund portfolio to be allocated to Bitcoin.
In November 2024, state legislators in Pennsylvania also introduced a bill regarding a strategic Bitcoin reserve. If passed, this bill would allow the Pennsylvania State Treasury to maintain 10% of its assets in Bitcoin.