Diversification in Global reserves.

[Yamane_Keto]

Whoever looks at Bitcoin and its impact on individual income believes that the same thing may apply at the national level, but countries investment in a different way from individuals, investment funds or companies are the link that may be between Bitcoin and countries, as these funds hold Bitcoin and grant loans to countries, exactly as was done with gold.
What I am suggesting is against the idea of Bitcoin, but it is the option currently available and this may change in the future.
I see that more countries are abandoning the old reserve concept and replacing it with borrowing from wealth funds to which oil revenues or any other revenues flow.

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[icalical]

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

[kingvirtus09]

If we are talking about investing in Bitcoin, I don't think we will have any problem there; instead, the only thing I see that is problematic here is that the government is still thinking about how they can control it, but they also know the answer in this matter is that it is not possible no matter what else they do.

That's why the government can only adopt or recognize Bitcoin or not recognize it, and if they do that, they will for sure be abandoned by other countries that will recognize it. It's that simple.

[lombok]

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

El-Salvador may be one of the countries that has made Bitcoin a reserve for now and adopted it directly (used for transactions in that country). This is the first step for Bitcoin to prove itself and be ready to shift the influence of the dollar.

Bitcoin is moving slowly but surely, starting with support from the community alone, continuing to grow until there is one country that believes in Bitcoin, Bitcoin still has a long story and I am sure there will be other countries like El-Salvador that are ready to accept and adopt BTC legally.

[m2017]

~snip

It is difficult to give a definite answer, because everything is possible. Let's wait and see what fate bitcoin will have as a share of the world's reserves. I am deliberately talking not about cryptocurrencies, but about bitcoin. This is the only decentralized cryptocurrency these days and I am sure that representatives of certain countries also paid attention to this. I don’t think that countries will keep their reserves in cryptocurrencies, when most of them are centralized and you can influence the issue of coins, freeze accounts, etc. This creates unnecessary risks and is no better than the dollar. I assume that first of all their eyes will be fixed on bitcoin. For example, El Salvador accumulates bitcoin, not dogecoin, right. Here is answer to you.

[Tony116]

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

Who told you that the US economy doesn't face any competition? Isn't the rise of China and the rise of BRICS competition from the US? If a country becomes the strongest power in the world, its currency will be considered the world currency and a reserve currency. This means that the USD can be replaced in the future if the number 1 position of the US is knocked out and replaced by another country.

You are right, bitcoin cannot yet become a global reserve asset for many reasons such as not being widely accepted as you mentioned. But with advantages even superior to gold and with growing acceptance, it is certain that it will become a global reserve asset.

[Davian144]

If we are talking about investing in Bitcoin, I don't think we will have any problem there; instead, the only thing I see that is problematic here is that the government is still thinking about how they can control it, but they also know the answer in this matter is that it is not possible no matter what else they do.

The government must change its mindset if it wants to adopt Bitcoin as other countries have done, because there is no way to control Bitcoin like they control fiat money in their respective countries. Each country's government can still exert their control over fiat and continue to use it as usual when they have adopted Bitcoin, so when they already believe in Bitcoin, it doesn't mean they have to immediately forget about the fiat they have used for a long time in everything.

That's why the government can only adopt or recognize Bitcoin or not recognize it, and if they do that, they will for sure be abandoned by other countries that will recognize it. It's that simple.

This is indeed quite simple, but sometimes the ego of the government which continues to maintain its own ideas without changing their mindset towards Bitcoin is still an obstacle for most governments. So until now there are still many countries that have not adopted Bitcoin payments even though several countries have not banned Bitcoin from being used for transactions and also as in life.

[Gozie51]

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

I go with this idea and the last part of it on the doubt bitcoin being used as reserve is correct because bitcoin is not controlled by any government and that a reason only El Salvador have been the country officially adopted it and no industrially developed countries have done that which is because they like to control what comes into their country for regulation. Like you also said in the past dollar have been the major currency for trade because of domination of USA in global financial economy with and things are changing with china , India, Russia and other countries in the south east pushing for economic competition and also presenting their local currency as center of bargain. Hence it is becoming clearer that no fiat currency will become the center of exchange no bitcoin but we are going to have more diversified currency in trade.

[mindrust]

USD, GBP, EUR, CNY, CHF… it really doesn’t matter how much you diversify your portfolio because all of these currencies have one thing in common. They are all FIAT and they are not backed by anything. You shouldn’t hold a lot of FIAT that’s not a good idea. Buy real assets like bitcoin, gold, land, stocks instead and you will be much happier in the long run. FIAT only goes down against the real assets in the long run so creating a portfolio of FIAT isn’t good for your finances. If you still insist on holding some FIAT, just hold USD. You don’t need to hold a basket of FIAT because it accomplishes nothing.

[AmoreJaz]

USD, GBP, EUR, CNY, CHF… it really doesn’t matter how much you diversify your portfolio because all of these currencies have one thing in common. They are all FIAT and they are not backed by anything. You shouldn’t hold a lot of FIAT that’s not a good idea. Buy real assets like bitcoin, gold, land, stocks instead and you will be much happier in the long run. FIAT only goes down against the real assets in the long run so creating a portfolio of FIAT isn’t good for your finances. If you still insist on holding some FIAT, just hold USD. You don’t need to hold a basket of FIAT because it accomplishes nothing.

i am also more on tangible assets rather than those fiat currencies. what i like about real-estate properties for example, is that their value is increasing thru time. whereas, gold or jewelries, won't depreciate much its value, if it will depreciate. it is actually more on the increasing side. and when it comes to stocks, you also need to keep up yourself about the companies you are going to invest with. sell if you feel that company is not progressing. buy shares if you think they have promising future.

[bitgolden]

It is difficult to give a definite answer, because everything is possible. Let's wait and see what fate bitcoin will have as a share of the world's reserves. I am deliberately talking not about cryptocurrencies, but about bitcoin. This is the only decentralized cryptocurrency these days and I am sure that representatives of certain countries also paid attention to this. I don’t think that countries will keep their reserves in cryptocurrencies, when most of them are centralized and you can influence the issue of coins, freeze accounts, etc. This creates unnecessary risks and is no better than the dollar. I assume that first of all their eyes will be fixed on bitcoin. For example, El Salvador accumulates bitcoin, not dogecoin, right. Here is answer to you.

Time will definitely tell us what's going to happen, but I also believe that the best thing to do in this case would be making sure that we are profiting, and that should be an important deal without a doubt. I hope that people could see where it can go, and that is an important thing. I understand that life may not be all that simple, but we could try our best the way we can.

This would allow us to get a lot better and it should not be all that weird on the long run. I know that life is not that easy like I said but making money for a nation is simple, they have billions, just put some of that in bitcoin and hold it, that would be smart. I do not know how many of them will use it though, they may not use it all that often.

[Wind_FURY]

The fiat currency as we all know is subject to inflation. Needless to say, a lot of economies have gone down due to it, but today, we're going to be talking about the US dollar.
 
The US dollar has lost 98% of its purchasing power since 1971 and has gone through an 8% decline in its shares of global reserves in 2021. Now the thing is, if the USD continues to face inflation this much, do you think the Global reserve would be worth anything much in the future?

Lately, other countries have begun to carry out trade in currencies aside from USD due to US sanctions and other reasons including trade war with China and fed hikes to reduce inflation.

I'm April, Emmanuel Macron, the French president said that Europe must reduce its dependence on the US dollar to keep its strategic autonomy and avoid becoming vassals to America.
Although dollars play a huge role in the world financial system and cannot be replicated by other countries, it doesn't still change the fact that it's declining and we may need alternatives to occupy shares in the reserves.

OP, the U.S. Dollar may be worse than the hardest money on Earth, Bitcoin, but if we're merely talking about macro-economics and how the value of other fiat currencies compare to the Dollar, then be prepared to accept this fact,



How much higher did those other currencies lost in purchasing power?
¯\_(ツ)_/¯

Gold seems like a fine option, considering how its purchasing power, remains more stable over time, but do you think cryptocurrency stands a chance?

 Now don't get me wrong, we all know and understand that Bitcoin in particular is decentralized, hence making it an alternative to money. Anyway, I intentionally used crypto and not Bitcoin since there are centralized coins that can be controlled by the Fed like USDC & USDT ( another thing is if they hold value as much as gold to be included).

So, do you think cryptocurrency stands a chance in share of the global reserves, now that countries are opened to diversification through assets?  

But be careful with Gold. The paper Gold market is being shorted by the banksters such as JPMorgan, https://franknez.com/jpmorgan-holds-bigger-short-positions-than-its-total-assets/

They're probably expecting a collapse in commodity prices.

[icalical]

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

I go with this idea and the last part of it on the doubt bitcoin being used as reserve is correct because bitcoin is not controlled by any government and that a reason only El Salvador have been the country officially adopted it and no industrially developed countries have done that which is because they like to control what comes into their country for regulation. Like you also said in the past dollar have been the major currency for trade because of domination of USA in global financial economy with and things are changing with china , India, Russia and other countries in the south east pushing for economic competition and also presenting their local currency as center of bargain. Hence it is becoming clearer that no fiat currency will become the center of exchange no bitcoin but we are going to have more diversified currency in trade.

Yeah, I agree that the decentralization of the Bitcoin, became the major reasons why it won't be global reserve, and it also why most of the governments don't want to adopt Bitcoin as legal tender. They need be in control on the currency that are used in their jurisdiction. But with the declining economic condition, I think more people will try to diversify their assets and they might move to bitcoin, maybe more goverments will at least legalize bitcoin as an investment asset.

[Silberman]

Yeah, I agree that the decentralization of the Bitcoin, became the major reasons why it won't be global reserve, and it also why most of the governments don't want to adopt Bitcoin as legal tender. They need be in control on the currency that are used in their jurisdiction. But with the declining economic condition, I think more people will try to diversify their assets and they might move to bitcoin, maybe more goverments will at least legalize bitcoin as an investment asset.

What we are seeing here is that the interests of the government and the population are different, governments like fiat currencies as they give them a massive amount of power and the only ones that lose are those which are outside the most exclusive circles, but it is on the best interest of people not only to limit how much governments can pry into their lives, but to also limit the control the governments can have over the economy, as governments have demonstrated many times they are not to be trusted as they have crashed the economy of countless countries through history thanks to that power.

[STT]

Governments hold gold because long term it always will outperform a currency being printed to excess, they will make a profit from their own mismanagement.   Gold itself has a flat performance, no yield its price is only especially changing (long term) due to the lesser side of that equation devaluing.     So I wouldn't hold it for performance but for stability and every national bank in the world has it I think.    Russia has gold but China had none at the start of this century hence they have been the largest purchasers every year for twenty years so far as I know.
  JPM shorting I dont count as much, every short is a future purchase.   Every time BTC is compared to physical commodities it should be the same point, they are not close to being the same thing even if the prices could be traded similarly the dynamics of a non physical product like BTC wont be similar to any commodity where they have to physically move and allocate it with cost of holding and so on.   Add in that BTC has a regulated supply unlike almost anything else I dont know why we'd talk which performs worse or best, they arent trying to do the same thing.   I'd generally agree central banks will have a bias towards holding gold, at present the whole world is biased to Dollar and that bias will decline in favor of almost anything else imo.

[killerfrost]

Actually, I don't find small arguments convincing compared to a long historical journey. The story of diversification is an obvious fact that at any time, adaptation to difficulties or prosperity can bring about major changes to the economy. Even at the present time we can speculate that blockchain technology will appear a lot in the future economy, but it is not entirely certain what will create value and attract cash flow into it.

[summonerrk]

So, do you think cryptocurrency stands a chance in share of the global reserves, now that countries are opened to diversification through assets? 

The dollar is an illusion currency. It has not been secured by anything for a long time, there are no kilograms of gold that you could exchange for tons of paper dollars. It turns out that the dollar is paper, but somehow, in an incomprehensible way, America managed to convince everyone that it is necessary to store and buy this particular currency. Nevertheless, sooner or later the power of the dollar will end, because the US national debt is greater than ever, and they already barely have enough money to service the interest of this debt.

[DrBeer]

With the current volatility and the adoption scale of Bitcoin the answer is no, the reason why USD became Global Reserve is because United States was the biggest economy without any competition, they supply many products and they also lend money to other countries, and those process required USD, same reason why Chinese Yuan /RMB is raising this day, Bitcoin wasn't adopted by any country that has huge economy, and bilateral transaction were never use Bitcoin, so I doubt that any country would consider Bitcoin to be global reserve.

Who told you that the US economy doesn't face any competition? Isn't the rise of China and the rise of BRICS competition from the US? If a country becomes the strongest power in the world, its currency will be considered the world currency and a reserve currency. This means that the USD can be replaced in the future if the number 1 position of the US is knocked out and replaced by another country.

You are right, bitcoin cannot yet become a global reserve asset for many reasons such as not being widely accepted as you mentioned. But with advantages even superior to gold and with growing acceptance, it is certain that it will become a global reserve asset.

Where's the competition?
China yes, huge, but export oriented, and export dependent economy, with lots of problems. Which will only get worse under the "new course of the party".

BRICS - the only stable and strong economy (against the background of other BRICS members) is India. So India has unambiguously voiced its vector of further development - western, with a developed western world, with western values, and without the support of rogue countries.
Tell me about the economies of the other BRICS members ? How can they compete ? NOTHING !
And India has chosen the optimal path - mutually beneficial cooperation, where India sees itself as the center of the "global south".

[josephsonand]

Cryptos offer some alternatives, but they've got hurdles to clear for global reserve status. Gold's stability is a strong point, but the crypto game is just getting started. Time will tell!

[Mauser]

 Now don't get me wrong, we all know and understand that Bitcoin in particular is decentralized, hence making it an alternative to money. Anyway, I intentionally used crypto and not Bitcoin since there are centralized coins that can be controlled by the Fed like USDC & USDT ( another thing is if they hold value as much as gold to be included).

So, do you think cryptocurrency stands a chance in share of the global reserves, now that countries are opened to diversification through assets? 

Theoretically crypto currencies would be the perfect currency to be the next global reserve currency. No country alone would have full control over it and the decentralization aspect would remove a lot of political pressure. Unfortunately we are not living in a perfect world and I don't see any chance at the moment for cryptos to become the new global reserve currency. The issue is that there is no common motivation to push for cryptos to take that goal. All the big countries in the world are looking for ways to trade outside of the US Dollar, the dominance of settling international trade in USD is going to keep declining. But it's not clear yet which currency is going to take itself. China, India or Russia will always push for their own currency and would not switch to a decentralized crypto alternative. The same goes for Europe with its large member block, I don't see a chance for all those countries to give up the Euro and use cryptos instead for trading. There might be support from smaller countries that don't see a chance for their local currencies to have any impact, or that is fluctuating too much and scares investors away due to the high volatility.