MicroStrategy Co-Founder Michael Saylor has been advocating a controversial proposition that the U.S. should diversify its monetary reserves by buying an equal amount of Bitcoin to how much gold it already owns.
The idea, originally presented by Robert F. Kennedy Jr., gained traction when Saylor shared it on social media, stirring a mix of support and skepticism from various financial commentators.
The proposal comes as global financial systems reconsider reserve assets and digital currencies gain significant traction. Saylor is suggesting that Bitcoin has the potential to be a valuable reserve asset—somewhere up there with gold—that could help cushion some of the turbulence in America’s monetary base.
Such a significant endorsement of Bitcoin by a government could signal a monumental shift in policy perception towards cryptocurrencies, influencing their market dynamics and broader economic integration.
Ironically, @saylor is looking for a government #Bitcoin bailout. He knows the Bitcoin blockchain letter is running out of chain and wants the U.S. government to become the buyer of last resort, leaving American taxpayers as the ultimate bag holders in the Bitcoin pyramid scheme.
— Peter Schiff (@PeterSchiff) July 26, 2024
Criticisms and Controversies
But this advice has not been without its critics, most notably Bitcoin skeptic and noted gold advocate Peter Schiff. Saylor’s plan is nothing more than attempting to get the U.S. to bail out Bitcoin, Schiff argues with added conspiratorial flavor estimating that this play funnels back into a general push to stabilize the price of BTC by having one single major buyer involved: United States government.
Schiff says it would end up just making the American taxpayer, who he believes are going to be left holding all the risk in what amounts to a Bitcoin pyramid scheme.
According to Schiff, this is similar to the classic Ponzi schemes in which older investors’ profits are provided by new entrants because as opposed to other tangible assets that possess an inherent productive use or yield — e.g. real estate (rents) and gold coins (jewelry), Bitcoin has no intrinsic value nor physical utility at all.
Schiff goes on to criticize the viability of Bitcoin’s valuation model, claiming it is based largely on market sentiment and speculative demand as opposed to actual economic utility.
Michael Saylor, while a prominent proponent of Bitcoin, has not publicly advocated for a government bailout but suggests that adopting Bitcoin as a reserve asset could offer long-term benefits similar to or exceeding those of gold.
