United States President-elect Donald Trump has confirmed plans to go ahead with a Bitcoin reserve plan that has been the talk of the industry. This decision is coming after Bitcoin’s $100,000 performance, with most crediting the massive surge to the influence of his reelection
Meanwhile, Russia, one of Trump’s biggest rivals, is also looking into the likelihood of creating its Bitcoin reserve. The country, led by President Vladimir Putin, believes there is an impending crypto cold war, with the stakes being global control and the future of money. In his speech at the NYSE, Trump hinted at doing something great with crypto, because he feels the country should be ahead in innovations.
Russia makes statement Bitcoin reserve push
Russia has not been coy about its Bitcoin reserve plans, with the country still facing sanctions from the West. With its currency reserves still frozen, Putin made a public statement praising Bitcoin’s ability to rival traditional financial systems.
Russia’s plan is clear and straightforward, it believes Bitcoin could provide an escape from the global financial landscape where the dollar is king. If its plan succeeds, it could tilt the economic balance in its favor, creating issues for the United States and its allies.
Senator Cynthia Lummis, in a bid to tackle the rising debts, has introduced the Boosting Innovation Technology and Competitiveness Through Optimized Investment Network Act. The act, known as BITCOIN, will see the United States acquire 1 million Bitcoins every year over the next five years.
However, the potential gamble comes with ramifications, with critics seeing purchasing $100 billion worth of Bitcoin at $100k per token as a big decision. Critics see it as a huge one, considering Bitcoin’s speculative nature. Yet, believers believe it is the right step, noting that its fixed supply makes it a perfect hedge against inflation.
Critics on alert amid calls for caution
Meanwhile, the decision has not gone down well with the critics and skeptics. Most argue that it is a bad move to use taxpayers’ money to fund such a reckless venture. They see Bitcoin as unable to generate income due to its speculative nature. A critic argued that the government would be the biggest fool.
With the cost of operating a Bitcoin reserve running into billions, it will be done by borrowing or printing more money, a move that could weaken the dollar and worsen inflation. A Bitcoin reserve could also open it up to financial institutions, taking it as collateral for loans. If the value drops, it could lead to a crisis, which could lead to the asset needing a bailout.
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