Interesting. Venezuela is banning Bitcoin for similar reasons to China but it's not working for them because they have lost control of their currency. When gold was rising Venezuela called back all its foreign gold reserves to bolster their own currency. Now that oil and gold have plummeted and the socialist government has mismanaged their finances, Venezuela is broke and selling off it's gold reserves for dollars. If they had converted all their gold to Bitcoin they would be doing mighty fine right now but then again that would have been a very risky move for any nation. China's central bank has also been accumulating lots of gold and some speculate to make a challenge to the supremacy of the petro dollar. So with their ban on Bitcoin and crypto exchanges it looks like China just like Venezuela is banking on their massive gold reserves to keep the government and the Yuan going strong. Unless they are working behind the scenes on their own version of a controlled crypto as I suspect many governments are doing right now. In fact, every government in the world with a department for National security should be running models on Bitcoin and other crypto currencies to assess the adoption rate and the very real threat to their sovereign currencies.
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Otage. The evidence is that many countries are buying gold. Russia, for example, bought 201 tons last year. So far, I have not heard of any country buying bitcoin for their reserves. Maybe that's because the $12 billion Russia spent on gold exceeded the entire market cap of bitcoin last year. The trouble with gold is that the more you buy, the higher the price. The higher the price, the more it encourages miners, which then increases the supply.
On the other hand, bitcoin's supply is capped at 21 million coins, whatever happens.
I guess central banks will start buying bitcoin when the price reaches a billion dollars.
Thanks for your reply. Yes, although there is a finite supply of gold in the earth's crust we probably have only just scratched the surface. Its like "peak oil." A few years ago when prices shot up people declared that we had reached "peak oil" and we were on a worldwide downward trend of discovery and production. The world would be thrown into chaos without enough oil to meet demands. New finds and new extraction methods have proved that that is not the case and oil prices have declined again. As you point out the Bitcoin market cap is still in it's infancy so it will be interesting to see where it goes and which central bank is going to be the first one to jump in and reap the rewards.
I like that: "which central bank is going to be the first to reap the rewards.". I wonder what it would do to the bitcoin price if a government or central bank announced that they would even consider it. Imagine it is little Switzerland, which has the fifth largest foreign currency reserves on the planet.
Yes I read from @jrcornel that some jurisdictions in Switzerland are accepting limited amounts of BTC towards tax payments. So it appears they are dabbling although most likely the BTC from tax payments is immediately converted to Swiss Francs.
In Switzerland, there are 10'000 train ticket machines that also sell bitcoins.
cool