How long before nation states buy bitcoin?

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WolfeTone

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A reasonable question at this point?

Ireland has announced a deficit for 2020 of €18bn. If the government were to purchase bitcoin they would put themselves ahead of the rest (assuming other nations are not secretly buying bitcoin already).

With collapsing finances, the disruption to the fabric of the economy will be felt in the years ahead. Having bitcoin in reserve could shoulder some of that burden.
 
Singapore's sovereign wealth fund has been stacking sats since 2018. Norway's more or less in the same boat with exposure via Microstrategy & Square.
 
What an excellent idea.
“Bloomberg analyst” said:
Bitcoin could hit $400,000 this year”
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Just imagine, if we could only get our hands on about 4% of bitcoins we could be debt free by end of this year. But would we be happy? We would still have the dreary steeples of Fermanagh and Tyrone to contend with.
 
And when the price of Bitcoin collapses (which it will, like all bubbles), how much will the debt grow by??
 
Peanuts20 said:
And when the price of Bitcoin collapses (which it will, like all bubbles), how much will the debt grow by??
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Of course it will, but the problem with identitying peak bubble is nobody knows how much the bubble will rise to, and what price it will crash to.

Implied in your comment is an assumption bitcoin is in a bubble, and at or near peak price?
You may be right, or you may be wrong... but I'm sure I have heard this before somewhere?
 
Duke of Marmalade said:
The idea is to get out before the bubble bursts. I envisage getting in and out maybe even in time for the October budget.
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According to your list of skeptics in the 'hyperbolic' thread - the list of people who know much more than you or I - the bubble is going to definitely, maybe, burst this year... around June to be precise, although they admit no-one knows what is going to happen they can definitely say it will happen this year, maybe.
 
Of course, the whole thing would have to be done in deadly secret, bitcoin perfect for that. I mean borrowing ECB cheap money to buy bitcoin! Everyone would want a piece of that. Which makes me think that maybe Pascal has already accumulated a decent pile, let's hope so.
There is a catch though. If we still hold a wad of bitcoin when SF come to power, would you send the private keys to the Fellon's Club on the Falls Road?
 

It is not an unreasonable question but I don't think they would be buying it to save the economy or anything as extreme as that. The NTMA manage our public assets and liabilities, within the NTMA there are a number of funds that follow various strategies i.e. long term obligations (state pensions) to funding day to day obligations. A quick browse of the annual statement and you will see they have invested in hundreds of equities across the globe to the value of billions. They have exposure to Paypal and Square, so they have indirect exposure to companies involved in crypto activity.

I see no reason that as institutional adoption increases the NTMA investment strategy wouldn't change to purchase direct BTC, Listed ETFs (once launched), or Public listed companies in the space.

However, given BTC is still a volatile and risky asset they would only be purchasing in size that meets their risk tolerance, e.g. I don't expect them to gamble the states pension funding on the price of BTC.

My bet that would be that once BTC ETFs get the greenlight thats how they will get their exposure. I will caveat that on the basis that I don't think the NTMA would spend the money to put the infrastructure in place to hold BTC themselves, but given the increasing rollout of custodial services offered by FIs, they could purchase directly and let a Coinbase or Fidelity hold.
 
Dublinbay12 said:
However, given BTC is still a volatile and risky asset they would only be purchasing in size that meets their risk tolerance
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True, but if nation states were to begin to accumulate bitcoin, even very small amounts, it would go someway to reducing the volatility in the long run.
 
WolfeTone said:
True, but if nation states were to begin to accumulate bitcoin, even very small amounts, it would go someway to reducing the volatility in the long run.
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That is speculation.

BTC will always remain a volatile* asset by nature of its design (that volatility may reduce as time passes). It will never be less volatile than cash and as such it will always be treated as a risky* asset by any Investment vehicle state or otherwise. This should be common knowledge because if BTC was not volatile there would be price appreciation. As of today BTC is still volatile and would fall into the riskier asset bucket, as such any investment by a state investment agency would treat it as such i.e. the beta / return of BTC is greater than the risk free market return.

*Both Volatility and Riskiness are Dynamic that are subject to change over time
 
Peanuts20 said:
And when the price of Bitcoin collapses (which it will, like all bubbles), how much will the debt grow by??
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If a CB or sovereign wealth fund can't take a low time preference position on bitcoin, then there's no hope for the rest of us. I don't hear much about the poor craturs that bought at $20,000 but no doubt we'll hear all about the next wave of innocents who bought at 100k (or $130,000 according to JPMorgan on the basis of ever reducing bitcoin volatility) from 2022 onwards.
As an aside, within the past 24 hours, bitcoin has overtaken the oldest fiat currency still in use (GBP£) to become the sixth 'largest' currency by market cap.
Duke of Marmalade said:
There is a catch though. If we still hold a wad of bitcoin when SF come to power, would you send the private keys to the Fellon's Club on the Falls Road?
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Ah, Duke - you do yourself a disservice by distinguishing between one group of governing clowns and another. However, if we must - I'd say it would be a 2 of 3 multi-sig affair with one set held by the minister of the day, and one each held by Ursula Van Der Leyen & the Healy-Rae brothers.
 
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It's an excellent idea. We just have to keep an eye on Reddit ringing the bell at peak.
 
tecate said:
The tide is turning on the subject. These latest comments from US Republican House Leader, Kevin McCarthy yesterday suggest as much.
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KMaC was a bitcoin fan in 2018 according to the interviewer. We also have the following quote from the interviewer.
"You are very rare in the political class in supporting bitcoin"
Amazing how different folk can read the exact same interview in opposite ways.
I read this as a maverick who was out on his own 3 years ago and is still out on his own now despite having been "proven right".
The cult sees this as a belated turning of the mainstream tide to the faith.
 
I heard that loud and clear. However, I'm not sure what you expect exactly? We have people time and time again warning that governments will ban it - now and over the course of the discussion here over the last 4 years - and yet it's getting increasing support on Capitol Hill. The suggestion was never that every congressman and representative in Washington is talking it up. Yet you have the likes of Warren Davidson, Darren Soto and others introducing legislation that is amenable to cryptocurrency. You had Patrick McHenry coming out at the time of the Libra hearings in 2019 saying that Bitcoin could not be stopped - and speaking positively about it. I watched those hearings in their entirety back then and there were a whole host of congressmen who spoke positively about it.
The state of Wyoming has changed its laws to facilitate the crypto sector. The state is now represented by a former State Treasurer who has held bitcoin personally for many years already, sits on the finance committee and is outspoken in her support for decentralised crypto and bitcoin.
The mayor of Miami and the state of Texas are following suit.
So Duke, it too amazes me how different folk can read the exact same interview in opposite ways.

Duke of Marmalade said:
The cult sees this as a belated turning of the mainstream tide to the faith.
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You keep using that terminology and you deserve the obligatory response as regards where the real 'cult' exists -> Link
 
In fear of going off-topic, I don't think the American political system is something we should hang our hats on. The below is a clear example of a conflict of interest, of course, the holder of BTC has a vested interest in pro crypto laws if it leads to a price increase. Similar to how Nick Lachey lobbied for the legalisation of weed in Ohio a few years back when him and his investors owned the farms that would be allowed to grow it.

Back on topic, the continued adoption through whatever means will make it easier for Governments Treasury functions to invest in BTC, but as mentioned above I don't think this will signal any large change in government strategy rather BTC will just be treated like any other investment in a well diversified portfolio.

I would like to hope that nobody here would be supporting governments gambling the pension fund on BTC.
 
Dublinbay12 said:
I see no reason that as institutional adoption increases the NTMA investment strategy wouldn't change to purchase direct BTC,
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If any state body buys bitcoin directly it would be the Central Bank as part of reserve management policy.

The Central Bank already holds gold. The NTMA does not, and never would.
 
Listening to Leo on RTÉ earlier talking about the disruption to the economy. He mentioned that as we don't have gold, oil or gas, we are very susceptible to what happens elsewhere in the global economy.
The interviewer missed the opportunity to then ask him about bitcoin.
 
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