Apr 17, 2025 12:05
In the latest installment of the Bitcoin Policy Hour, a weekly podcast produced by the nonprofit Bitcoin Policy Institute (BPI), leading members of the organization discussed how a single policy decision by the United States government might catapult the price of Bitcoin to extraordinary new highs. According to Executive Director Matthew Pines, the worlds monetary framework has remained largely the same since 1973, when the global financial system pivoted away from a full gold standard. When you think about the monetary system we currently live in, he said, its been around since 1973 and gone through a number of crises and evolutions, but the fundamental structure of it really hasnt changed. He then pointed out that because nations such as China have emerged as industrial, military, and financial heavyweights, the stability of that long-standing dollar-based system is under challenge in ways not seen in decades. Head of Policy Zach Shapiro added that concerns about losing trust in the US dollar and its reserve assetthe US Treasury securityhave fueled discussions around alternatives. If you want to talk about what else could be a reserve asset, he said, gold is an obvious candidate. He added that since the United States froze Russias Treasury reserves last year, there has been a feeling from central banks around the world that treasuries are becoming less of a neutral reserve asset and so foreign governments have been stacking gold. That could clear some runway for Bitcoin to replace or supplement golds historic roleespecially if the Trump administration announces their first Bitcoin buy. Related Reading: This Bitcoin Pullback Mirrors 2017s Path To Parabolic Highs, Says Analyst When asked about the longstanding policy idea of marking gold to market and using the proceeds to buy Bitcoin, Shapiro explained that formally revaluing Americas statutory gold pricestill set by law at around $42 per ounce even though world markets trade gold above $3,200could generate what he called a large surplus on Treasurys books that we could then spend on stuff. He mentioned that if those proceeds were directed into Bitcoin, it would be a one-time trick that adds almost a trillion dollars to our balance sheet on paper. But why are we doing that and why do we think now is the time? Pines emphasized the global implications. The gold certificates are a subplot in this larger strategic competitive dynamic, he said, referencing ongoing trade friction and technology restrictions between the US and China. When you have the great powers of the world deciding theyre going to up the ante against each other, youll see moves in many domains: tariffs, export controls, currency systems, and yes, monetary assets such as gold and Bitcoin. Discussion then turned to a White House executive order issued in March that formalized the Strategic Bitcoin Reserve and instructed agencies to conduct a Bitcoin audit, with results due to the Presidents Working Group on digital assets. Pines noted that it literally said Bitcoin is digital gold, is in our strategic interest, and that we need a strategic Bitcoin reserve, even though, in his words, people outside the US government at first questioned whether that was real or just a campaign promise. Related Reading: Bitcoin Price Forecast: What Experts Anticipate Following The Jump Toward $85,000 Shapiro confirmed the White House did indeed require each agency to identify which digital assets it currently owns from forfeiture or other means. By statute, they had thirty days to do this, he explained. But that report goes to the Secretary of the Treasury and the Presidents Working Group, not necessarily the public. While the White House order also urged budget-neutral methods of acquiring new Bitcoin, no single agency has yet outlined exactly how they intend to do it. Both Pines and Shapiro said that internal government debates, as well as confusion about what budget neutral means, might slow implementation. It cant impact other budget line items, said Shapiro. But tariffs, for instance, are not something that costs the American taxpayer money directly, and thats one way thats been floated to raise funds for Bitcoin. Selling assets already on the governments balance sheet is another. Thats budget neutral too. If the Trump administration does indeed buy Bitcoin, the price implication could be massive, according to the BPI. Shapiro stated: If the United States announces that we are buying a million Bitcoin, that’s just a global seismic shock. I think that really is a big deal. I think first the Bitcoin price goes through the roof. I think we will probably go very quickly to something like a million dollars per Bitcoin. However, the geo-political could be even greater, Shapiro added: Then you have to wait and see what sort of dominoes fall from that. What are the second order effects of Bitcoin, just being monetized on a faster trajectory than I think a lot of people anticipate. The first is a sort of reaction from other nation states’ reactions […] I suspect that Bitcoin being monetized that strongly and that quickly would have a negative impact on sort of the long-term outlook for gold. At press time, BTC traded at $83,594. Featured image created with DALL.E, chart from TradingView.com
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