The parallels to gold and the role of El Salvador
Ferranti begins his report by pointing out that central banks around the world are continually increasing their gold holdings. This could suggest that too Bitcoin as digital gold offers a similar appeal. The most striking example of a central bank that has already taken this step is El Salvador: Here, Bitcoin makes up almost 10% of the central bank’s reserves.
Ferranti notes that an ideal share for Bitcoin could be between 2% and 5% of total reserves, which represents a balanced complement to traditional assets. By comparing it to gold, Ferranti highlights that Bitcoin could act as a digital counterpart in many ways – both assets are limited and decentralized, offering protection in economically uncertain times.
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Long-term performance and response to inflationary pressures
Ferranti points out that while Bitcoin’s volatility can lead to bearish trends in the short term, it outperforms many other investments in the long term – thanks in part to the halving, which reduces the supply of new Bitcoins roughly every four years. While both gold and Bitcoin might underperform in some phases, they show their strengths and increase in value during inflationary times.
Interestingly, Ferranti’s studies indicate that Bitcoin price increases often signal future bouts of inflation. This feature makes Bitcoin potentially valuable to central banks as it can be a leading indicator of economic developments and serves as a strategic asset against inflation risks.
Central Banks: Skepticism and the Strategic Potential of Bitcoin
Although Ferranti’s arguments are compelling, many central banks remain skeptical of Bitcoin. Nevertheless, interest in Bitcoin seems to continue to grow, especially in countries like Bhutan and Ethiopia, which now mine Bitcoin themselves. An exciting question remains unanswered: Will profits from state-owned Bitcoin mining flow into these countries’ reserves?
While some countries may already be discreetly accumulating Bitcoin, others may soon officially consider making this move public – especially as pressure from “game theory” effects increases. Once assumed, one or two central banks follow suit El Salvador For example, this could trigger a chain reaction, especially if the US takes this step. In the United States, there are already bills proposing the creation of a strategic Bitcoin reserve, further highlighting the relevance of the issue.