El Salvador set the trend for nation-state Bitcoin adoption by creating a Bitcoin reserve in 2021. Years later, American states have now started to announce similar plans for a Bitcoin reserve in their own jurisdictions. Trump's team threw a wrench in the trend with his latest executive order to create a national reserve of "digital assets", which includes bank-friendly Ripple (XRP).
This pissed off many people, especially Bitcoin maxis.
Jack Mallers, the CEO of Bitcoin payment app Strike, uploaded a video to X absolutely livid that Ripple is undermining the potential for a national Bitcoin reserve in the United States. The fact that Trump launched his own memecoin before his presidential inauguration didn't help matters either.
What is the problem with a country having a national reserve of cryptocurrencies?
Crypto vs. The Nation
Bitcoin, and crypto in general, was engineered to be decentralized, censorship-free, and facilitate peer-to-peer transactions - the opposite of a nation state. The government has always acted as a middle-man in our transactions. For example, when it comes to money creation (fiscal spending), collecting taxes, and making expenditures. Crypto's purpose has always been to replace intermediaries like governments, banks, etc.
That said, as we transition towards a more decentralized world, there could be temporary benefits to a country (or state) holding Bitcoin/crypto on behalf of its people. Aside from adding more legitimacy to the industry itself, a government could also potentially use profits from crypto sales to subsidize the cost of food and housing for its citizens as inflation gets out of control.
Only Bitcoin?
There are 10s of thousands of cryptocurrencies being traded every day, with more being created all the time. Although the majority of these tokens have little to no future, there are still plenty with massive potential. Finding the gems requires a lot of time sifting through the bad to find the good. Calling everything besides Bitcoin a "shitcoin" is much easier to do than putting in the time to do the research.
Currency Wars
There's never a dull day in crypto, right?
Despite all the controversy, the whole situation is making for a lot of great entertainment on X! Bitcoin maxis are flipping out that the Trump administration would have the audacity to include other cryptocurrencies (especially XRP) in their national reserve.
Meanwhile, a significant portion of the population is adamantly against any form of national Bitcoin or crypto reserve. Some believe that Gold is the answer to the hyperinflation that awaits us. Another cohort of the population is completely ignorant when it comes to fiat, gold, and crypto, and would probably welcome a draconian CBDC.
From my perspective, we are heading into a world of currency wars. Bitcoin maxis will continue to fight against other cryptocurrencies and those who support them. Then, as the fiat system crumbles around us, eventually other cryptocurrencies will start fighting with one another for market dominance.
My prediction has been and continues to be that crypto will eventually fracture nations into smaller zones, which will adopt their currency of choice while rejecting the others.
Until next time...
If you learned something new from this article, be sure to check out my other posts on crypto and finance here on the Hive blockchain. You can also follow me on InLeo for more frequent updates.
Further Reading
- Inside the Minds Of No-Coiners, Bitcoin Maxis, and Shitcoiners
- It's Official: Oklahoma Latest State To Propose Bitcoin Reserve