Reshab AgarwalWhy doesn’t the government just print money and buy Bitcoins? This is something we all must be wondered about at some point in time. And the question is justified as we often see the government releasing stimulus checks of trillions of dollars. Well, the thing is, they have the power to do that, but there are a lot of problems associated with it. So, let’s take a look at them.
The problem with this idea
It does seem to be a brilliant idea to make money, but in such a case, the price of BTC will skyrocket, and this will lead to a hyperbolic bull market. And in such markets, often the retailers lose money. It will also make many individuals super-rich, giving them a lot of power which will disturb the government. Another important thing to note is that the federal reserve also needs to agree to the idea of buying Bitcoins with the money they print. The power of printing money doesn’t actually lie in the hands of the government but the central bank.
Image Source: Forbes
Printing money to buy Bitcoins will also lead to hyperinflation, which will further push down the value of the dollar. And the government wouldn’t obviously want that the dollar goes down in value while BTC increases. This is why as of now, the only medium of acquiring BTC for the government is through confiscations. They generally confiscate Bitcoins from criminals and auction them later when they deem fit.
I don’t think that the US government yet sees Bitcoin as a rival to the dollar. And this is why they will be least interested in printing money to get their hands on some.
I hope that now you understand why doesn’t the government just print money and buy Bitcoins? The only answers I found to this question was on quora which I referenced to write the article. What do you think about the same? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.
Also Read: Bithumb breaks trademark partnerships with 2 foreign exchanges.