In a recent opinion piece published by Bloomberg, a prominent business and financial news source in the US, the focus was on Bitcoin and the proposed strategic reserve. The article, written by Bloomberg’s Editorial Team on December 9th, questioned whether or not the government needs a Bitcoin strategic reserve. The answer provided by Bloomberg was a resounding “no,” with the news organization labeling the proposal as the cryptocurrency industry’s “biggest rip-off yet.”
The recent surge in the price of Bitcoin, which has exceeded $100,000 after a 50% increase since November 4th, has sparked renewed interest in legitimizing Bitcoin as a financial asset and integrating it into the national reserve as a potential hedge against inflation. However, Bloomberg argues that Bitcoin is purely a speculative asset with no real connection to the economy or industrial use.
The US government currently maintains strategic reserves of oil under its Strategic Petroleum Reserve (SPR), which is designed to ensure a steady oil supply and support employment, low inflation, and manage the financial system. Bloomberg points out that Bitcoin does not serve the same purpose as oil in the national reserve, as it lacks intrinsic value and is based solely on speculative trading.
The Editorial Team at Bloomberg warns of the risks involved in the government investing in Bitcoin, emphasizing that it could lead to an increase in national debt, inflation, and a negative impact on the US dollar. They also caution that the adoption of Bitcoin as a reserve could have detrimental effects on the country’s economy and financial structure.
Furthermore, Bloomberg highlights the potential negative impact on banks and financial institutions if they were to accept Bitcoin as collateral. This could lead to a decrease in the asset’s price, financial collapse, and the need for a bailout. The Editorial Team argues that adopting Bitcoin in the finance sector is a risky move that could benefit only a few holders and investors, while leaving the government and the general public as the “greater fool.”
In conclusion, Bloomberg’s stance on Bitcoin as a strategic reserve is clear: the government does not need to approve the proposal, as it is seen as a risky and potentially damaging move. The Editorial Team emphasizes the speculative nature of Bitcoin and the lack of real value or connection to the economy, warning of the potential negative consequences of integrating Bitcoin into the national reserve.
