How—and Why—to Build a Bitcoin Reserve

CURRENCY CORNER

All over the world nowadays… from the US to Switzerland to Hong Kong… countries are looking to build bitcoin reserve funds, just as they once built gold reserves.

“Currency” has never singularly been about paper bills and coins. Currency is anything a society deems worthy of transactional value. In prison society, cigarettes are a currency. In Venezuela, certain online gaming tokens were a currency amid hyperinflation.

As I predicted several years ago, the world is now looking at bitcoin much more like a currency… rather than just a digital asset.

That’s because modern society is increasingly worried about sovereign fiat currencies, particularly debt-laden Western currencies.

The thinking is simple: No one controls bitcoin. And bitcoin reserves are finite—you can’t make more to pay the bills.

It’s volatile, but when fan and dookie inevitably meet, central banks will rapidly devalue fiat currencies to save economies, and bitcoin will shine.

So, if a bitcoin reserve is good for government, then it’s good for us too.

The easy way to build your own bitcoin reserve: Stuff 5% of your portfolio into bitcoin. You can own it directly through a crypto exchange like Coinbase, through a brokerage account, or in an IRA by way of a bitcoin exchange-traded fund such as iShares Bitcoin Trust (IBIT).

If you lose the entire 5%, you’ve lost about one year’s worth of dividends.

And if bitcoin does what I expect—crosses the $1 million mark before the end of the decade—your 5% stake will be 10 to 15 times bigger.