In the past few years, bitcoin has gained a lot of popularity and got adopted by many countries worldwide. However, it is still considered that Bitcoin adoption is in its infancy, and it will take time for every country in this world to adopt it.
Could every country match its gold reserve with Bitcoin?
If we take the current bitcoin price, i.e., around 20,000$, it would be nearly impossible for countries to match its reserve with bitcoin. The reason is that: the total gold and foreign reserve held by 160 countries are around 15$ trillion, which is 39 times larger than Bitcoin’s market capitalization at its current $20,000 per coin.
Theoretically, 750 million bitcoins would be needed by each country to replace their gold and their foreign currency reserves with BTC. And even a 3 percent allocation would represent around 22.5 million BTC, more than the total number of BTC in circulation.
Another issue in doing this thing is that not every bitcoin is available for sale, and it is estimated that around 3.7 million BTC coins have been lost since its development. This brings the current supply of this cryptocurrency to just close to 15.5 million, making the 3 percent allocation seem more impossible at the current per coin price.
What is the better approach?
However, a better approach is needed since around 3.8 million bitcoins have not been offered for sale over the last 3 years, meaning the owner had held during the sub-4,000 dollars crash as well as its peak to 69,000 dollars. Thus, the total number of coins currently in circulation is around 11.7 million, which means the minimum price of 3% allocation would be around 38,500 dollars per coin.
Assuming the countries take the 38,500 dollar price mark as final and every bitcoin which has moved over the last few years has been offered for sale, then considering the foreign currency and gold reserves of every country; China will need a total of 2.67 million BTC, Japan would require 1.1M BTC, whereas Switzerland would hold 864,800 BTC to match their gold reserves. However, Bitcoin adoption is in its infancy, and it would take years for the numbers to come true.
What are your thoughts on the current price of Bitcoin? What do you think will any government match its gold reserves with BTC? Let us know in the comments below. And, if you found our content informative, share it with your family and friends.
Also Read: Anchorage co-founder says there is “no clarity” on crypto regulation in the US.
