Debt, Inflation, And The ‘Global Race’ For Bitcoin

$850 billion in 90 days. That is the amount by which the US has raised the national debt for the last quarter, coupled with worries about inflation and the devaluation of the dollar. With purchasing power in the U.S. down 25% over the past five years, Bitcoin’s scarcity and resilience are drawing attention from governments.

Pro-Bitcoin advocate Anthony Pompliano recently warned, “…there is a global race for Bitcoin going on right now,” further urging nations to act swiftly before being left behind.

The coin’s price reflects this urgency. The largest crypto asset has recently set a new all-time highs after trading above $93,000. This marks a two fold growth over the past year.

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Spot Bitcoin exchange-traded funds (ETFs), introduced in January, have attracted unprecedented inflows, including $2 billion in just two days following President-elect Donald Trump’s victory.

Legislative Push For Bitcoin

Senator Cynthia Lummis is also supporting Bitcoin and its importance to the United States finance in the “Bitcoin Act of 2024” or the U.S Bill S4912.

The proposed legislation aims to protect holders through banning the federal agencies from confiscating it and vesting more worth in the digital properties.

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The act demonstrates more and more understanding of the capacities of the world’s leading crypto in stabilizing the finances of the United States in relation to escalating national debt.

The legislative move squares well with Trump’s agendas to create a “Strategic Bitcoin reserve” and promote homegrown mining.

Global and Domestic Bitcoin Adoption Heating Up

Pompliano explained how other small countries such as El Salvador and Bhutan have leveraged on the opportunity from Bitcoin.

The Latin American country of El Salvador with Nayib Bukele as its president started dollar-cost averaging into Bitcoin in 2021 and has purchased 5,932 BTC, which is equivalent to $538,942,727.08.

Due to this year’s skyrocketing cryptocurrency, the country’s reserves are valued at more than $526 million and earned more than $120 million with today’s price.

Bukele’s hardline approach has shut the critics, with even the IMF which raised alarm over economic insecurity.

Indigenously too, adoption is gradually increasing in the United States. This week, Florida’s CFO Jimmy Patronis urged the state to invest, specifically in the state pension fund.

The government of Pennsylvania is proposing a bill in which the state treasury should invest 10% of it in the crypto. Indeed, Trump’s campaign of getting a “strategic Bitcoin reserve” has firmed up the market alongside aiming for American Bitcoin mining.

Institutional Momentum and MicroStrategy’s Example

The institutional shift toward Bitcoin is epitomized by BlackRock’s iShares Bitcoin Trust (IBIT), which has recorded $40 billion in inflows in just 211 days, surpassing other ETFs launched in the last decade.

In the meantime, Michael Saylor’s MicroStrategy continues to serve as a model of BTC integration at the top managerial level.

As Bloomberg reported, the firm has bought $26 billion in Bitcoin since 2020 and surpassed the cash reserves of companies such as Nike, IBM and Johnson & Johnson..

This risky move has given MicroStrategy such a strong market position that its shares have increased by more than 2,500% along with the 700%  growth of BTC.

Mark Palmer, an analyst at Benchmark Co. with a “buy” rating on the shares, believes MicroStrategy’s accrual and holding strategy has no defined endgame.

“Given the way that Bitcoin has moved in 2024 in particular, there’s really no reason why the company would divert from that approach,” he told Bloomberg.

Strategic Asset for the Future

Pompliano emphasized the low-risk, high-reward potential of Bitcoin for the U.S., stating, “Even a fraction of $850 billion in debt added last quarter could transform the country’s strategic reserves.”

As nations and corporations increasingly embrace it, the race to secure the asset intensifies, cementing its role in the global financial system.

As the popularity strengthens fueled by Trump, institutional uptake, and global interest, Bitcoin’s role as a strategic reserve asset is solidifying. The question isn’t whether Bitcoin will shape the future of finance—it’s who will lead the charge.