Author: Matt Hougan, Chief Investment Officer of Bitwise; Translated by: 0xjs@Golden Finance
I just got back from the annual Bitcoin Conference in Nashville, and to be honest, I was having a bit of a hard time wrapping my head around everything I saw there.
Here are some highlights:
Republican presidential candidate Donald Trump has announced plans for the United States to establish a national strategic bitcoin reserve and said he wants to make the U.S. the “crypto capital of the world.”
Senator Cynthia Lummis has introduced a bill calling for the U.S. Treasury to acquire 1 million Bitcoins on the open market.
Rep. Ro Khanna, D-Calif., called on the Democratic Party to “reject the hostile policies of the past” and embrace Bitcoin as an essential part of America’s financial future.
Independent presidential candidate Robert Kennedy Jr. called on the U.S. Treasury to buy 4 million Bitcoins. This sounded crazy until he gave an explanation: the U.S. currently holds 19% of the world’s gold reserves, and 4 million BTC would be an equal share of Bitcoin.
Sen. Roy Haggerty, R-Tenn., said loving Bitcoin is “in his DNA,” equating it to freedom and liberation. His colleague, Sen. Marsha Blackburn, R-Tenn., drove around the convention area in a truck touting her support for Bitcoin.
Democratic presidential candidate Kamala Harris did not attend the meeting, but she felt enough political pressure to leak the party’s plans to “restart” engagement with crypto companies.
This is crazy.
Less than two years ago, FTX collapsed in a historic fraud, Bitcoin was trading at $17,000, and skeptics were dancing on the grave of cryptocurrencies. Now, politicians are openly talking about building a “Bitcoin Fort Knox.”
Of course, it’s easy to dismiss Washington’s embrace of cryptocurrencies as shameless opportunism. Cryptocurrency is a political force: More than 80 million Americans own cryptocurrencies, and the industry has one of Washington’s largest super PACs. Most politicians don’t really like Bitcoin; they’re just succumbing to its growing popularity.
But I’m not sure it matters. When you say “opportunism,” I say, “That’s how politics works.” Politicians accept crypto because Americans accept crypto.
Regardless, the fact remains: Washington’s view on the possibilities of cryptocurrencies has changed. A year ago, the SEC sued Coinbase for operating an illegal securities exchange. Now, the Justice Department is working with Coinbase to protect its cryptocurrency — we’re talking about the U.S. holding Bitcoin as a reserve asset.
For investors, these developments mean you need to reassess the size of Bitcoin’s potential near-term upside.
As cryptocurrency investors, we spend a lot of time focusing on downside risk. We are all acutely aware that an event could occur at any time that causes a significant price drop. It is often said that Bitcoin “could go to zero.”
I think we have to accept that there is an equal amount of upside risk now. Will we wake up tomorrow to find that a G20 country has added Bitcoin to its balance sheet, hoping to get ahead of the US? Could comprehensive US cryptocurrency legislation pass faster than expected as bipartisan support grows? Will Wall Street embrace cryptocurrency on a much larger scale than most people expect? (Just today, Goldman Sachs CEO David Solomon told CNBC that Bitcoin can be a store of value.)
These ideas might have seemed like pipe dreams a year ago. But after witnessing them last week, they seem more likely.
If Bitcoin 2024 conveyed anything, it was this: Now is the time to rethink what’s possible with Bitcoin.
