United States, the race for BTC reserves.
At the beginning of Paradigm in 2018, we firmly believed that the value of BTC (then about $4,000 each) would increase several times in the coming years, partly due to increased legitimacy and institutional adoption.
However, at that time, the likelihood of sovereign nations adopting BTC was still very low. Now it seems that possibility was underestimated.
Currently, multiple sovereign nations hold BTC, with El Salvador being the most notable.
Abu Dhabi Sovereign Wealth Fund is involved in Bitcoin mining.
President-elect Donald Trump discussed strategic Bitcoin reserves on the Nashville stage.
U.S. Senator Cynthia Lummis proposed legislative drafts for strategic Bitcoin reserves.
The prediction market platform Polymarket estimates that the probability of Trump establishing a strategic Bitcoin reserve is about 30%.
So what? As Tyler Cowen likes to say, seek equilibrium.
The game theory equilibrium for BTC adoption has changed.
Sovereign nations can no longer ignore BTC. From a game theory perspective, BTC is like gunpowder, not an iPhone.
Christopher Nolan can choose not to adopt the iPhone; his deliberate Luddism might even lead to enhanced creativity.
But once gunpowder was discovered, every sovereign nation was forced to adopt it... otherwise, the consequences were dire. Today, AI, drones, and other key technologies are the same.
Now that the Overton window for the U.S. adopting BTC has opened, other sovereign nations will not wait. Sovereign nations that establish BTC reserves early will benefit from significantly more favorable entry prices.
The race for sovereign nations to build BTC reserves has begun.
El Salvador, the first reserve nation.
In September 2021, El Salvador became the first country to start purchasing Bitcoin as a treasury reserve asset. That same year, the country also adopted Bitcoin as legal tender.
The El Salvador government has developed a plan to turn the country into a Bitcoin hub, paving the way for other countries to follow suit. The country plans to issue Bitcoin-backed bonds.
El Salvador's bold Bitcoin initiatives have paved the way for widespread adoption in multiple sectors globally. Currently, several Wall Street firms offer Bitcoin-backed investment products, and cryptocurrencies dominate the current U.S. election cycle.
Moreover, the country has been continuously expanding its Bitcoin holdings. President Bukhle confirmed this in an interview with Time magazine.
In May 2024, this Bitcoin-supporting country launched a Bitcoin treasury tracking system, allowing anyone, anywhere, to monitor their Bitcoin holdings in real-time. Meanwhile, Bukhle refused to predict the future of Bitcoin but believes it has potential.
Bhutan, holding over 780 million US dollars in Bitcoin.
Bhutan is a Himalayan country with a population of less than 1 million, operating a Bitcoin mining business through the state-owned enterprise Druk Holdings, accumulating over 780 million US dollars in Bitcoin, which accounts for almost one-third of its GDP.
The mining operation is related to Bitdeer, which has been expanding its mining facilities in the country, aiming for a capacity of 600 megawatts by 2025.
Bhutan's investment in digital assets is part of a broader strategy by Druk Holdings to diversify income sources, with recent wallet activity showing both deposits and withdrawals, including significant transactions with exchanges like Kraken.
