A recent Bloomberg editorial criticized the U.S. government's plan to create a strategic Bitcoin reserve fund, calling it the biggest scam in the crypto market. The article also points out that the objectives of this initiative remain unclear and pose certain financial risks to taxpayers.
The editorial emphasizes that while traditional strategic reserve funds often focus on accumulating essential products like oil to sustain the economy and protect national interests, the Bitcoin reserve fund lacks similar objectives. Bitcoin has long been considered a speculative asset, with no industrial use value or connection to the real economy. Its value entirely depends on market perception, and therefore governments should not use Bitcoin for financial or social plans.
Financial risks from the Bitcoin reserve fund
Using taxpayer money for Bitcoin could lead to severe financial losses. The article argues that if the government decides to fund this reserve, it will have to increase national debt or issue new money, which would spur inflation and weaken the value of the U.S. dollar.
Moreover, because Bitcoin is highly volatile and has no real intrinsic value, the reserve fund could become worthless, impacting taxpayer money by hundreds of billions of dollars. This proposal could also affect the financial structure and the economy in general.
If banks and other financial institutions decide to accept Bitcoin as collateral, a sharp decline in Bitcoin's price could trigger another financial crisis that would require a bailout. This scenario illustrates the risks of accepting Bitcoin as a financial instrument at the institutional level.
On the other hand, the article also notes that this could lead to the enrichment of current Bitcoin holders and pose significant financial risks to the government.
"The government will play the fool..."
Is Bitcoin heading towards centralization?
Initially, Bitcoin was designed for transactions outside the control of any financial institution. According to the article, the call for a government-sponsored Bitcoin reserve fund is ironic, as this is a step towards centralization.
The article criticizes leading exchanges, including Coinbase, for supporting initiatives that go against the very nature of cryptocurrencies.
In summary, the U.S. government's establishment of a Bitcoin reserve fund is an unwise decision and poses many financial risks. The article argues that this move will mainly benefit current Bitcoin holders, while taxpayers face the risks. It also suggests that crypto economies should not expand beyond their scope to avoid risks to the national economy.
https://tapchibitcoin.io/bloomberg-us-bitcoin-reserve-fund-is-the-biggest-crypto-scam.html
