Everything you wanted to know about Bitcoin Strategic Reserve

[coolcoinz]

    Summary

1.    Fed chief says not seeking power to hold bitcoin at central bank
2.    There is growing momentum for government bitcoin reserve
3.    Fed officials have been skeptical about cryptocurrencies

I'd say 1. and 2. are only good news for Bitcoin, and 3. is no surprise.

Exactly and I said it in another thread. Powell did not say anything new, strange, or unexpected. He said the truth, that the FED is not trying to set up a crypto reserve at the moment. Why would they? Trump has no power yet and it's his idea. Holding bitcoin should be done by a branch created specifically for that. You don't want to give a bunch of random bankers with traditional background some private keys and hope they'll keep them secure. Most of these grandpas have secretaries that do computer stuff for them. You need to hire crypto experts to set up a cold storage for you, pretty much like EL Salvador has done.

[fillippone]

    Summary

1.    Fed chief says not seeking power to hold bitcoin at central bank
2.    There is growing momentum for government bitcoin reserve
3.    Fed officials have been skeptical about cryptocurrencies

I'd say 1. and 2. are only good news for Bitcoin, and 3. is no surprise.

1 as well is not surprise. In Every SBR discussion it never was the FED designed to hodl the coins. It either was the Treasury or a newly designed Entity (presumedly non the crypto Kratz, btw).

A lots of details, but no need to change any current scheme or law.

[LoyceV]

Most of these grandpas have secretaries that do computer stuff for them.

Secretaries? I'd expect them to have a newphew that fixes their computer. How hard could it be to ask that nephew to set up a little wallet for storing a million Bitcoin? Just create a private key out of the nuclear launch codes or something Just don't use 00000000 again

[BlackHatCoiner]

If this drops the price of Bitcoin, that means people were expecting something else from the FED. Like.... seriously?

People have all kinds of foolish expectations, but the market is more complicated than it looks like. When all the stocks are on fire, it's reasonable for bitcoin to lose some percentage as well, because it's plausible that some people liquidate their holdings at that time.


Powell stated that they "are not allowed" to own any bitcoin. To me, this marks a significant shift in perspective. We've moved from the critique that bitcoin is "backed by nothing other than thin air" to the acknowledgment that "this is not the appropriate department to hold it". It's bullish, but I remain skeptical until I see it put into practice, and so should everyone in this thread. You're relying on politicians to do their job right. Hasn't worked well as far as history is concerned.

[LoyceV]

We've moved from the critique that bitcoin is "backed by nothing other than thin air"

That's a funny statement coming from the fiat-guys. Fiat is only backed by other fiat. Or one could argue it's backed by an army, which makes Bitcoin backed by armies too once governments add it to their Strategic Reserves. Fun times

[fillippone]

We've moved from the critique that bitcoin is "backed by nothing other than thin air"

That's a funny statement coming from the fiat-guys. Fiat is only backed by other fiat. Or one could argue it's backed by an army, which makes Bitcoin backed by armies too once governments add it to their Strategic Reserves. Fun times

Bitcoin is a peace instrumentm: in a FIAT world, if you want to go to war, just print a hoard of currency, and buy weapons.
In an hard currency world (Bitcoin) you cannot do that, hence you are forced to choose your battles very wisely, as you have to sign a loan to buy more weapons, and the war must be won, to repay it.
Fiat are backed by armies.
Peace is backed by Bitcoin.

[NotATether]

Probably most crucial to all this is how the government will even acquire all those bitcoins in the first place.

Since Silk Road bitcoin is going there, that means about 800k bitcoins need to be acquired in some way.

But I'm not comfortable with one entity owning 5% of the entire supply, especially when you consider that Satoshi has over 5% and Coinbase alone has another 5%.

There is also the case of lost bitcoins. Not provably-lost coins, but the non-provably-lost type. It is my belief that these coins will eventually be found and make their way to miners, and quite possibly offset the cost of selling coins to the feds.

[LoyceV]

But I'm not comfortable with one entity owning 5% of the entire supply, especially when you consider that Satoshi has over 5% and Coinbase alone has another 5%.

This isn't something I worry about. It's not as if we can do anything about it, and "the Bitcoin market" is as free as it gets.

There is also the case of lost bitcoins. Not provably-lost coins, but the non-provably-lost type. It is my belief that these coins will eventually be found and make their way to miners, and quite possibly offset the cost of selling coins to the feds.

One question: How? Miners can't access lost coins without finding the private key or changing the protocol, and none of that is going to happen.

[BlackHatCoiner]

Probably most crucial to all this is how the government will even acquire all those bitcoins in the first place.

That's actually a good question. Probably they buy every day, just like El Salvador. The difference is in the size, though. El Salvador buys around 1 BTC per day. If the Bitcoin act passes, they will be buying more than 500 BTC per day. That could easily cause a supply shock at some point.

But I'm not comfortable with one entity owning 5% of the entire supply, especially when you consider that Satoshi has over 5% and Coinbase alone has another 5%.

In the world we live in, a couple of families own around half of the world's wealth. It's not a Nirvana world, unfortunately, but this is what we have.

[fillippone]

That's actually a good question. Probably they buy every day, just like El Salvador. The difference is in the size, though. El Salvador buys around 1 BTC per day. If the Bitcoin act passes, they will be buying more than 500 BTC per day. That could easily cause a supply shock at some point.

It's interesting to notice that El Salvador sped up their Bitcoin buying after the IMF granted them a few extra funds:




On Dec 20 and Dec 22, they bought 11 BTC in addition to the usual 1 BTC daily.

I don't know if they will keep buying these additional 11 BTC, but surely it is trolling at its best.

[fillippone]

The last nation-state looking for an SBR is Switzerland:

Swiss central bank faces call to hold bitcoin in reserves

A group of crypto supporters now has 18 months to gather 100,000 signatures to promote a referendum on the possibility for the SNB holding BTC as a reserve.

[LoyceV]

The last nation-state looking for an SBR is Switzerland:

I like this part:

The central bank's chairman said last month he was wary about cryptocurrencies such as bitcoin and ether.

Anyone else is wary about central banks. I realized this years ago: if governments and central banks are against something, it's most likely something I'm going to like

[fillippone]

The last nation-state looking for an SBR is Switzerland:

I like this part:

The central bank's chairman said last month he was wary about cryptocurrencies such as bitcoin and ether.

Anyone else is wary about central banks. I realised this years ago: if governments and central banks are against something, it's most likely something I'm going to like

The SNB is a sui generis Central Bank. Given the buying pressure on CHF, they are actually hedge funds. Everyone wants CHF, so they print it out of thin air, and with the proceeds, they buy real assets, namely gold and equities ( they own MSTR as well).
Anyway I don’t like CB, now that they buy Bitcoin. I am happy they are slowly realising what Bitcoin is.

[LoyceV]

Anyway I don’t like CB, now that they buy Bitcoin. I am happy they are slowly realising what Bitcoin is.

I bet they're already figuring out a way to replace it with some sort of paper money, like they did with gold. Or maybe a bit more modern, in the form of CBDC backed by Bitcoin. Until they decide to inflate it away.
I'm not handing over my coins.

[fillippone]

Or maybe a bit more modern, in the form of CBDC backed by Bitcoin. Until they decide to inflate it away.
I'm not handing over my coins.

This smells of Zimbabwe Dollar from one hundred miles away.



Lastest addition to the BSR bunch:

Czech National Bank weighs bitcoin purchases for potential reserve asset diversification

Speaking with CNN Prima News, a local media company, Michl revealed that he had suggested the Czech central bank purchase bitcoin to diversify its asset holdings, but clarified that there are no plans to acquire any cryptocurrency.

"Sure, I consider bitcoin, but there are seven of us on the board," Michl said, adding that discussions would continue. "Bitcoin
 BTC -4.93%
 is an interesting option for diversification against other assets."

"I was thinking of acquiring just a few bitcoin, but I never intended to make a significant investment," Michl added.

This seems a "just because" scenario. Adding a few bitcoin to the balance sheets is incredible for a European Central Bank.
Only a few bitcoins, I would say, are almost irrelevant in the balance sheet of a central bank, yet the signalling power would be gigantic.

[babo]

I don't write much outside the Italian forum, but I follow and read
for example the question of the Lummis law would shatter all my predictions and those of others
let's say it would be a good step, or rather a leap forward

it would also be the most logical choice, if politicians had logic

This is a great thread with lots of ideas.. ty fillippone

[fillippone]

On December 30, a Judge cleared the DoJ to sell 69K bitcoins:



Luckily, according to Arkham, the sale wasn't carried out.
But as DB states, it would have been at least inconvenient if the current administration sold such a large chunk of the government holdings just weeks before Trump's inauguration.

[STT]

Dumping the coins to force a sell off then buying back more at the new lows to realize a profit on foreseen BTC accumulation would resemble the OJ futures scene from Trading Places.  Chaos but funny I guess and price is not the greatest thing to worry about, its only a label for approximated value on that day.

A group of crypto supporters now has 18 months to gather 100,000 signatures to promote a referendum on the possibility for the SNB holding BTC as a reserve.

A remember a motion to take the Swiss back to the gold standard, they were the last to leave it.  The country or at least its withheld assets would have been much richer had they done so at that time.  Generally central banks on purpose are constantly devaluing common currency that the workers are paid in, making people poorer and labor cheaper is not accidental and it benefits the richest of those countries.

To say I dont believe a leopard will change its spots is a slight understatement on this or any similar idea.

[LoyceV]

But as DB states, it would have been at least inconvenient if the current administration sold such a large chunk of the government holdings just weeks before Trump's inauguration.

Isn't there a claim of ownership by the agency that confiscated the money? I'm not sure how much of this applies to this case:

The FAIR Act would:

   Eliminate “Equitable” Sharing: The “equitable” sharing program allows state law enforcement officers to turn seized property over to federal officials for forfeiture — and get up to 80% of the proceeds of the forfeited property. The FAIR Act ends “equitable” sharing and ensures that law enforcement cannot ignore state law.

I can imagine some agency doesn't want to hand over those Bitcoins to the Trump administration, if they can claim a large part of it for themselves. But again: I don't know if this applies to this case.

[fillippone]

But as DB states, it would have been at least inconvenient if the current administration sold such a large chunk of the government holdings just weeks before Trump's inauguration.

Isn't there a claim of ownership by the agency that confiscated the money? I'm not sure how much of this applies to this case:

The FAIR Act would:

   Eliminate “Equitable” Sharing: The “equitable” sharing program allows state law enforcement officers to turn seized property over to federal officials for forfeiture — and get up to 80% of the proceeds of the forfeited property. The FAIR Act ends “equitable” sharing and ensures that law enforcement cannot ignore state law.

I can imagine some agency doesn't want to hand over those Bitcoins to the Trump administration, if they can claim a large part of it for themselves. But again: I don't know if this applies to this case.

I guess that agencies ARE the Trump administration, and if they are ordered to hand over the seized funds to a "Bitcoin Strategic Reserve agency", they have little to do against it.
I am unfamiliar with that part of the legislation, but the agencies don't "own" the bitcoins. Otherwise, they wouldn't need a judge to authorise them to sell the funds trough the US Marshalls.