This weekend both Donald Trump and Robert F Kennedy spoke at the Bitcoin conference in Nashville. It was a huge moment for Bitcoin, it was the first time that US Presidential candidates talked about Bitcoin in public, and announcing ideas for a US strategic Bitcoin reserve.
This could have a huge impact on the Bitcoin price. It’s all about game theory: once one large nation states announces it will start buying Bitcoin, other nations states will immediately start doing this as well. Nobody wants to be first, but certainly nobody wants to be last. And when the US is first everyone wants to be at least second.
Because Bitcoin has a limited supply (only 450 new BTC are created per day, about $30M at current prices), the only way for these countries to get these coins is for others to sell them to them. This is different from Gold, where higher prices means that it’s now possible to mine at more expensive locations, so the Gold supply eventually will go up when the price goes up (and the market expects that, thereby capping the growth of the Gold price). Most people will not sell their Bitcoin if they see nation states are starting to buy (why sell today if you can sell for a higher price tomorrow?), leading to much higher prices.
How high? If the US would follow RFK’s plans it would mean that the US would buy more coins per day than are being mined. This would be ongoing for years to come. That would be the moment Bitcoin could go up hundreds of percent within a few months, simply because people won’t sell anymore. My expectation is that very soon other countries would follow (the longer they wait the more expensive it would be to build a Bitcoin reserve), meaning that Bitcoin could break $1 million within a year.
Neither Trump nor RFK are in office (yet), and even if they would be elected it’s the question whether they will follow through on their promises. But these speeches will have woken up other countries. Because of their announcements, talking about Bitcoin is suddenly something that won’t get you fired for anymore if you bring it up. On Sunday a Hong Kong politician announced that he will start looking at a strategic Bitcoin reserve for Hong Kong. A Dutch friend of mine (and a Bitcoin whale) has been working on a Dutch Bitcoin party idea for a while and he just posted about it. I am quite sure there are several other countries looking at a Bitcoin reserve idea right now, they have just not announced it yet.
Once the cat is out of the bag you can’t get it back in. When we will look back in a few years this weekend could have been the watershed moment for Bitcoin as a reserve asset for nation states. One of the reasons I started to invest in Bitcoin years ago was that I knew this moment would come one day. However, I am surprised to see how quickly it could now all of a sudden happen. My expectation was that this would start bottom up, with small countries like El Salvador (that has been buying BTC regularly for years) leading the way, not with the US as the main cheerleader for Bitcoin. There will be very interesting times ahead!