There is no getting away from it. A global recession looks to be on the cards unless something is done by a variety of central bankers to turn things around. This is making many argue a case for Bitcoin as a global hedge against such things, but are governments also believing this?
There have been rumors swirling that Venezuela, a country on the precipice of an economic collapse which has already turned to crypto, may have stored away a vast swath of Bitcoin and Ethereum. Does this perhaps indicate that other countries are doing the same, in secret?
It would be odd to hear of major economic powers like the US, UK, and the likes storing the decentralized cryptocurrency, but it would probably be a good idea. Governments have been prone to string up masses of gold as a protective hedge against poor economic times, so why not Bitcoin?
This question has been asked before, but it also has been answered by some of those in the know. Chris Mancini, the analyst of Gabelli Gold Funds, has said in an interview with Kitco that gold, not its digital competitor Bitcoin, will be used as a hedge currency in case of a potential economic crisis by governments.
“The Russian government, the Chinese government are buying gold,”” he said. They are not buying Bitcoin. That’sThat’s the ultimate play. That the ultimate currency. That’sThat’s what the governments are going to tie their currencies too if and when something really bad happens.””
Gold has long been the best alternative for individuals and governments to avoid problems with the global financial system, but Bitcoin is quickly growing into this role. The digital currency has a long way to go to prove it can withstand a collapse in the economy, but on paper, it makes a lot of sense.
However, what would be interesting to see is just how many governments would buy into the cryptocurrency if it was to prove itself. Bitcoin prides itself on being out of the control of central forces, and even though gold is similar, it is still prone to controls.
Bitcoin may well be the best alternative for impending global financial uncertainty, but that does not necessarily mean it will get full buy in from governments – although, maybe not publicly. While Venezuela may have Bitcoin stores – as well as North Korea – we cannot be sure others do… or don’t.