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A proposal for the United States to amass a million Bitcoin sounds like something pulled out of a nerd’s wildest dreams, but it’s an actual idea on the table. A few months ago, Senator Cynthia Lummis of Wyoming dropped a bill that aims to create a “strategic bitcoin reserve.” Her plan? Get the Treasury and Federal Reserve to buy a million Bitcoin over five years and stash it for at least 20 more. If passed, the program would essentially transform Bitcoin from a decentralized experiment to a federally endorsed hedge against… well, everything. For Bitcoin holders—hodlers, as they call themselves—this bill is the ultimate jackpot. It’s the government’s acknowledgment of Bitcoin’s credibility as “freedom money.” But let’s be real: if you owned a stack of Bitcoin and suddenly the richest, most powerful country on the planet declared they’d be buying truckloads of it, you’d probably be popping champagne too. It’s like owning a few Andy Warhol paintings and hearing Washington announce they’re creating a national Warhol museum. But here’s the thing: Lummis’s bill raises more questions than answers. The plan sounds bold, sure, but where’s the money coming from? According to the proposal, the Federal Reserve’s surplus profits would fund these Bitcoin purchases. There’s just one tiny problem—the Fed doesn’t currently have surplus profits. No problem, right? Lummis suggests revaluing the Fed’s gold certificates to market prices and funneling the difference into Bitcoin. Creative? Yes. Impressive even. But plausible? We’ll see. Bitcoin’s appeal and its tricky reality Imagine the US government holding 5% of Bitcoin’s total supply. That’s roughly one in every 20 Bitcoin in existence. The bill’s preamble argues this would diversify US assets, strengthen resilience, and, in theory, position America at the top of the financial food chain. But those million Bitcoins can’t be touched until 2045. So…

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Filed under: News - @ November 23, 2024 8:15 pm