Donald Trump, the current US presidential frontrunner, made a bold promise last week. If elected, he has vowed to set up a strategic bitcoin stockpile using the around RM69 billion worth of bitcoin that the US government currently owns.
This is directly at odds with the policy of the current administration which periodically auctions off this bitcoin that it has confiscated through years of law enforcement.
Announcing this at the recent bitcoin conference in Nashville, US, Trump and his Republican allies set themselves apart from the Democratic establishment that has been averse to bitcoin and bitcoin companies.
He highlighted an incredible feat:
In just 15 years, bitcoin has gone from merely an idea posted anonymously on an internet message board to being the ninth most valuable asset anywhere in the world.
In addition, he pledged
These are strong words from the man who is seen as the favourite to win the upcoming US elections.to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world.
Sure, many would be quick to point out that a politician’s promise holds little value as history has demonstrated time and again that most rarely keep their promises. But this time may just be different.
After all, the newly minted crypto super PAC (a political action committee that funds politicians that align with its interests) has already become the largest super PAC of this election cycle – raising around RM941 million and beating out older, more established super PACs that dominated the electoral funding campaigns of the past.
Trump and his ilk would not want to lose access to such a gargantuan pile of cash and draw the ire of the tens of millions of Americans who hold bitcoin and crypto. So even if he doesn’t fulfil all his promises, he’s likely to fulfil many of them.
Right after Trump’s speech, Senator Cynthia Lummis of Wyoming introduced an even more ambitious plan. She’ll be tabling a bill that, if passed, will require the US government to buy 5% of the world’s bitcoin (1 million bitcoin).
She proposes that this purchase be made using the excess reserves of the 12 US federal reserve banks over the next five years. Her rationale is simple: instead of holding the US dollar that debases at anywhere from 3-8% a year, it’s better to hold bitcoin, which appreciates by around 58% a year.
On the back of Republican support for bitcoin and crypto, 30 Democratic politicians urged the current US establishment to take a more forward-looking approach to it by saying:
From an electoral standpoint, crypto and blockchain technologies have an outsized impact in ensuring victories up and down the ballot.
This is a smart move from these politicians who have correctly identified that bitcoiners are an increasingly influential and wealthy group of single-issue voters that may just swing the election their way.
Democratic congressman Ro Khanna is one such politician, who made a salient argument for embracing bitcoin:
Being against bitcoin is like being against cell phones. It’s like being against AI. It’s like being against laptops. It’s a technology. Have thoughtful regulation on the technology, but it’s a technology that has appreciated from about $10,000 to $80,000.
Across the world from the US, Hong Kong lawmaker Johnny Ng took a page out of Trump’s playbook and has suggested a similar approach. He said:
The global acceptance of Bitcoin is constantly increasing. In the future, it is indeed possible to research and consider including Bitcoin in strategic financial reserves, as long as it is compliant.
If Trump is elected, it will be a huge tailwind for bitcoin, which is already trading near its all-time highs.
Anwar and Malaysia have a golden opportunity here. By embracing bitcoin now and instituting it as a reserve asset, they can frontrun the US’s likely purchase of bitcoin.
You can be sure that once the US institutes bitcoin as a reserve asset, it’s just a matter of time before many other nations emulate it. But by then, the gains will diminish as the price soars.
The right time to buy is now, right before most realise that bitcoin is a bonafide nation-state asset.
Since no major nation besides El Salvador has made such a move, Anwar can become a pioneer in the region by buying bitcoin and putting it on Malaysia’s balance sheet.
After all, it’s about time we become trendsetters, rather than trend followers. - FMT
The writer can be contacted at kathirgugan@protonmail.com.
The views expressed are those of the writer and do not necessarily reflect those of MMKtT.
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