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Author: Biteye core contributor Viee
Editor: Biteye core contributor Crush
Community: @BiteyeCN
*The full text is about 3,000 words, and the estimated reading time is 5 minutes
"Never sell your Bitcoins," Trump said at the Bitcoin 2024 conference in Nashville this weekend, providing the crypto with the strongest emotional value in recent times.
During Trump's speech, Bitcoin staged a V-shaped trend. First, it fell short-term, losing $67,000. At the end of the speech, when he announced that Bitcoin would be listed as a strategic reserve asset, Bitcoin rose straight up and regained all the value. The decline even exceeded $69,000.
During his previous term as president, Trump had harshly criticized cryptocurrencies, calling them a "scam." Now, he even bluntly stated at the Bitcoin Conference that "Bitcoin has become the ninth-largest asset in the world by market capitalization and will soon surpass silver and gold in the future."
Such a big change shows that cryptocurrency users have begun to become a growing political force.
From "Internet scam" to "politician lobbying handle", ten years have passed. Why has Bitcoin turned around?
Not only Trump, but Mike Novogratz, CEO of asset management company Galaxy Digital, also publicly stated, “Although Bitcoin’s current market value is less than one-tenth of gold, it is rising rapidly and will definitely exceed Gold market cap, and it won’t be long.”
MicroStrategy CEO Michael Thaler also holds a similar opinion, believing that "digital gold" will replace physical gold by the end of this century.
Have you ever wondered why so many world-class tycoons make no secret of their belief in Bitcoin? Is it a fantasy, or is it justified?
First of all, you need to know, why is Bitcoin similar to gold?
- Scarcity. The total number of Bitcoins is fixed at 21 million, and it is expected that all Bitcoins will be mined by 2140. This limited supply gives Bitcoin a scarcity similar to gold.
- Anti-inflation ability. Bitcoin, as "digital gold", is considered an effective inflation hedging tool. Although Bitcoin has only been around for about ten years and has only experienced the test of inflation during the COVID-19 epidemic, its unique algorithm and distributed system give it the ability to withstand inflation. JPMorgan research shows that institutional investors are increasingly choosing Bitcoin over gold as a safe-haven asset.
- actual value. Gold's value comes from its widespread use in luxury goods and electronics, among other things. The value of Bitcoin comes from its innovation in the monetary system. Its encryption technology and distributed network enable billions of people around the world who have not entered the banking system to enter the financial system.
Since both assets are so popular, what is the real reason why Bitcoin is better than gold?
The answer is return performance and supply, with Bitcoin enjoying annual returns of nearly 120% over the past decade, compared to gold's annual returns of just 2%. Unlike gold, Bitcoin’s supply is clearly capped, ensuring its inherent scarcity.
Gold has always been a symbol of value storage and wealth preservation. But when the decades of inflation that began in the 1970s ended, gold's performance began to be relatively bleak.
From 1980 to the end of 2023, gold's inflation-adjusted total return was -4%. Over the past decade, gold's annual return has been just 2%.
In addition, the supply of gold is difficult to control, with mining and new discoveries making its quantities uncertain. Even historically, the United States has confiscated gold through Executive Order 6102, which is a vulnerability of gold to government intervention.
However, Bitcoin is emerging with unparalleled advantages. As the world's first cryptocurrency, Bitcoin not only has strict supply restrictions, the total supply is fixed at 21 million, and no one can change its supply to ensure its scarcity.
Over the past ten years, Bitcoin’s annual return has been as high as 120%, an astonishing figure that far exceeds that of gold. Not only that, Bitcoin is based on the global blockchain network and cannot be tampered with or confiscated, providing investors with an unprecedented sense of security.
As the market matures, Bitcoin's volatility gradually weakens, creating more stable opportunities for long-term investors.
More importantly, Bitcoin gives holders true financial sovereignty, is free from currency manipulation, and perfectly adapts to the needs of the digital age.
Thus, Bitcoin came on the scene and became the value reserve in the new era!
Returning to what was mentioned earlier, Trump mentioned at this conference that Bitcoin would be listed as a strategic reserve asset, which directly pushed the price of Bitcoin to climb above US$69,000.
The original words are as follows: "If I am elected, my government policy will be that the United States will retain 100% of all Bitcoins currently held or acquired in the future. We will retain 100%. I hope you are doing well. This is actually Will serve as the core of the strategic national Bitcoin reserve.”
Although this commitment is relatively conservative, it certainly highlights the importance of Bitcoin as a global financial asset. Trump has also been an outspoken critic of the Biden administration's crackdown on cryptocurrencies, saying such policies are damaging to the U.S. economy.
In contrast to Trump's caution, independent presidential candidate Robert F. Kennedy Jr. has presented a more radical vision.
He promised that if elected, he would launch an ambitious Bitcoin reserve plan-buying 550 Bitcoins every day until the reserve reaches 4 million. The proposal is far bolder than Trump’s plan and aims to turn Bitcoin into a strategic national asset.
In Wyoming, Senator Cynthia Loomis is also actively promoting a national reserve plan for Bitcoin. She plans to draft a bill that would require the government to build a reserve of up to 1 million bitcoins within five years and use it solely to reduce the national debt over the next 20 years.
This scheme undoubtedly further strengthens Bitcoin’s position as a long-term financial asset.
The above public statements have quickly pushed Bitcoin into a hot topic in the global financial and political fields. We all know that national governments may own Bitcoin as reserve assets. For example, the U.S. government is one of the largest holders of Bitcoin. The federal government owns nearly 210,000 Bitcoins, accounting for 1% of the total supply.
In 2021, El Salvador announced Bitcoin as its official currency anchor, becoming the first country to use BTC as a legal currency. In addition, Switzerland has also passed legislation to include Bitcoin in its national bank reserves.
So, what does this really mean?
Looking at a set of data, according to VanEck's report hypothesis, Bitcoin may become an important part of the international monetary system in the next few decades as geopolitical tensions and debt repayment costs put pressure on the existing system.
The report predicts that Bitcoin’s global reserve asset status will gradually increase, and its proportion in international foreign exchange reserves is expected to reach 2.5%.
In this way, it can be seen that Bitcoin is gradually transforming from an emerging asset to an important component of the global financial system. Bitcoin’s status is rising rapidly, both in the United States and in international markets.
Therefore, Hong Kong is not to be outdone.
Fang Hongjin, co-chairman of the Hong Kong Blockchain Association, recently suggested that the Hong Kong government should use the anti-inflation properties of Bitcoin to diversify the asset allocation of the Exchange Fund to reduce dependence on the U.S. dollar, and should continue to purchase and hold Bitcoin as part of its foreign exchange reserves.
He believes that Bitcoin not only has the potential to surpass gold, but also significantly enhance Hong Kong's influence in the global financial market.
Hong Kong legislator Ng Kit-chuang also expressed support for this trend when commenting on Trump's speech at the US Bitcoin Summit.
He believes that Bitcoin and Web3 are key nodes in the development of globalization. In the future, Bitcoin can be included in official fiscal reserves in compliance with regulations.
He also emphasized that Hong Kong should speed up the construction of the Web3 ecosystem to attract the world's top talents and investment.
Hong Kong is following suit and actively exploring the possibility of including Bitcoin in its foreign exchange reserves. All this shows us that Bitcoin may become a key pillar in the global financial system.
From the United States to Hong Kong, more and more governments and financial institutions are paying attention to the unique advantages of Bitcoin.
In this world of increasing digitization and devaluation of fiat currencies, Bitcoin is gradually replacing gold and becoming the value reserve of choice for a new generation due to its scarcity, high yield and financial sovereignty.
It is expected that this trend will promote the further rise of Bitcoin in the international market in the next few years.
If the current drop of Bitcoin from 60,000 to 50,000 makes you sleepy, let me tell you a horror story: if it reaches the market value of gold, the price of one Bitcoin may soar from the current US$69,000 to nearly US$600,000.
At that time, you may be able to appreciate the weight of the sentence "Never sell your Bitcoins."
Risk warning: Crypto assets have higher risks. The above is only information sharing, not investment advice.
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