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China’s ban on crypto has manifested itself in making cryptocurrency transactions illegal, making miners leave the country, and blocking access to sites with information about crypto prices and charts. Entrepreneur and investor Anthony “Pomp” Pompliano makes a convincing argument for why the US should do the exact opposite.
Senate candidate Blake Masters recently put out a tweet that took many people by surprise:
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“China banned cryptocurrency last week. Let’s do the opposite. The US government should buy a strategic reserve of Bitcoin — Fort Nakamoto, the new Fort Knox. Related: my U.S. Senate campaign now accepts BTC donations.”
According to Pompliano, this is a highly logical response. China makes great effort to stop its citizens from adopting open technologies. This has hurt its population, but it has made the government more resilient and stronger. Embracing the products and technologies that China has tried or is trying to ban has paid off: Google, Facebook, and Twitter all saw their value skyrocket.
The numbers speak
Next year’s fiscal budget is set at just over $6 trillion. Should Bitcoin (BTC/USD) have a 1% chance of becoming the global reserve currency, that’s equivalent to $60 billion. With a current market cap of $792 billion and about 60% of circulating supply held by people who don’t want to sell, there is still available supply of $316 billion that can be exchanged at any time.
US could buy $20B worth of Bitcoin
The US could try to buy $60 billion of Bitcoin, which would be approximately 20% of the tradable circulating supply and 1% of their annual budget. Realistically, though, the US could buy $20 billion worth of Bitcoin at today’s prices. This would be just over 2% of the total of 21 million or around 465,200 Bitcoin. Seen in that context, the country would become one of the biggest Bitcoin holders in the world – for less than 0.5% of an annual budget.
Nothing to lose
If the value of Bitcoin continues to rise, the country will be best positioned to take the digital helm out of any nation state, Pomp concludes. If not, the US lost a rounding error amount.