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White House Says Gold Reserves May Be Used to Purchase Bitcoin (finance.yahoo.com)

submitted 1 week ago by geneva_convenience@lemmy.ml to c/nottheonion@lemmy.ml

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A senior White House official has hinted at the possibility of the U.S. utilizing its gold reserves to acquire more Bitcoin (CRYPTO: BTC).

"If we actually realize the gains on the U.S. gold holdings, that would be a budget-neutral way to acquire more bitcoin," Hines said adding that there's been "countless ideas" and the “best ideas" will be enacted by President Donald Trump.

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[–] sp3tr4l@lemmy.zip 1 points 13 hours ago* (last edited 13 hours ago)

... As would every other currency.

Most of which are backed by more sane, stable, underlying governments and economies than the US...

... and they are much, much more connected to actual tangible factors than a completely speculative asset that has utterly failed to function as an actual generally accepted currency everywhere and time that has been attempted.

Same with gold or silver or fine art... etc.

If a hyperinflation scenario actually happens, all that means is the dollar weakens. It does not mean bitcoin strengthens generally... it would only strengthen in comparison to the dollar.

... But, because the vast majority of real money flowing into funding bitcoin investments is dollars, I would be willing to bet that bitcoin would basically also drop against basically all other currencies.

Bitcoin is largely a proxy currency for gambling with USD. Not entirely of course, not perfectly...but uh... there are way less stablecoins pegged to Not USD, and way less volume in them.

I am fairly confident that... yeah, if the USD hyperinflates, bitcoin exchange rates would pretty much track with USD:EUR and USD:Lira rates... though hey, if you have roughly 10 million USD right now, and think you can run a currency arbitrage when/if the USD goes tits up, maybe you can actually make some money.

Or lose it all due to massively inefficient bitcoin trading markets and exorbitant trading fees as compared to what all the real, giant, big boy financial firms have access to.

Bitcoin doesn't have fundamentals. Bitcoin being 'deflationary by design' doesn't matter at all, because it isn't a currency. It isn't used as a currency in any general economy (that isn't already inna disaster), it isn't regulated like a currency is.

It is basically emtirely a barely regulated speculative proxy for mostly USD investments... if you take money out of USD, in a hyperinflation scenario, you may or may not do a bit better than keeping that money in USD, but you will almost certainly still lose money if you want to convert your bitcoin into a non hyperinflating currency.