Coinbase Makes Case For Bitcoin Strategic Reserve

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MARKETS TREND

Coinbase Chief advocated for Bitcoin over gold and called on governments to set aside funds for it, predicting that its market value will eventually overtake gold.  Brian Armstrong, CEO of Coinbase, has proclaimed Bitcoin a “better form of money” than gold, pointing to its divisibility, portability, and scarcity as key advantages.

Armstrong thinks that within five to ten years, the $2 trillion market capitalization of Bitcoin could overtake gold.  He has urged governments to allocate some part of their holdings into Bitcoin because it is a more contemporary asset for strategic reserves and a better store of value.

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Armstrong’s comments followed Governor Lesetja Kganyago of the South African Reserve Bank (SARB) rejecting the notion of governments holding Bitcoin reserves.

Kganyago questioned the strategic significance of Bitcoin by drawing a comparison between it and gold’s longstanding status as a reliable store of value and a standard for currency.

Armstrong explained his reasons for thinking Bitcoin is better than gold in a thorough post on X (formerly Twitter).

He pointed out that Bitcoin has greater fungibility, portability, and divisibility than gold, which is decentralized and scarce. He also noted that, in contrast to Bitcoin transactions, which are transparent on the blockchain, it is more challenging to confirm the purity of gold.

Armstrong highlighted the growth potential of Bitcoin, pointing out that it only accounts for 11% of the market capitalization of gold.

He recommended that nations start by putting at least 11% of their gold reserves into Bitcoin, then gradually increase their holdings as the cryptocurrency’s market capitalization rises. “If the U. S. leads by setting up a Strategic Bitcoin Reserve, the other G20 countries will probably do the same,” Armstrong said.

He urged governments to consider Bitcoin as a long-term store of value, calling it the best-performing asset of the past ten years. In contrast to gold’s historical significance, Kganyago rejected Bitcoin as a reserve asset during the World Economic Forum in Davos.

Additionally, Kganyago maintained that rather than being determined solely by market forces, Bitcoin as a reserve should be the subject of a larger public discussion.

 

 

 

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ABOUT THE AUTHOR See More
Olumide Adesina
Olumide Adesina
Financial Market Writer
Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.
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