In a recent preliminary vote, Microsoft shareholders have collectively turned down a proposal to invest in Bitcoin. This unanimous rejection reflects a broader debate surrounding cryptocurrencies, particularly heightened by former President Donald Trump’s recent comments about establishing a national Bitcoin reserve, which many financial experts view with skepticism.
Criticism of Bitcoin Reserve Proposal
Larry Summers, who previously served as Treasury Secretary under Clinton and managed the U.S. gold reserves, has been outspoken in his criticism of Trump’s idea. He argues that the proposal lacks depth, asserting that keeping Bitcoin — which he describes as a “sterile inventory” — in a national reserve is illogical. Summers suggests that the push for such a reserve seems more aligned with political motives rather than sound economic policy.
Trump’s Ambitions and Legislative Actions
Trump’s interest in a national Bitcoin reserve first emerged during a Bitcoin conference last July. His goal is to create a strategic reserve of the cryptocurrency to enhance the financial stability of the U.S. and to prevent rival nations, especially China, from emerging as leaders in the crypto space. He has voiced concerns at recent rallies, emphasizing that inaction could enable other countries to seize control of the burgeoning market.
- To support this initiative, Senator Cynthia Lummis has introduced a legislative proposal urging the U.S. government to gather one million Bitcoin over the next five years.
- This would account for roughly 5% of the total global supply.
- Proponents argue that acquiring this amount could help reduce the national debt, currently hovering around $36 trillion, without imposing new taxes.
- All while strengthening the dollar by diversifying national assets.
Market Reaction and Continuing Concerns
The market has reacted positively to Trump’s ambitions; Bitcoin’s value recently surged past the $100,000 threshold. Reports suggest that Super Political Action Committees (PACs) linked to the crypto industry have made substantial donations to Trump’s campaign, fostering a political environment favorable to cryptocurrency supporters.
In an effort to advance his administration’s crypto agenda, Trump plans to form a crypto advisory council, inviting leaders from major cryptocurrency firms to participate. He has also appointed David Sacks, a venture capitalist, as a White House advisor on AI and cryptocurrency. Sacks will work on developing regulations to guide this rapidly growing industry.
Nonetheless, the proposed national Bitcoin reserve has garnered significant criticism. Figures like Peter Schiff, CEO of Euro Pacific Precious Metals, warn against the inherent volatility of Bitcoin and the risks associated with using taxpayer funds for such investments. He cautions that government involvement could lead to a harmful cycle of persistent purchasing, ultimately damaging the dollar’s value. Schiff argues that maintaining an asset that cannot be liquidated and necessitates ongoing investment is ineffective as a reserve strategy, suggesting it could undermine public confidence in the dollar.
As of the latest updates, Bitcoin’s market price is recorded at $97,933, reflecting a slight decline of 1.5% within the last 24 hours.
Source: Bitcoinist
