Setting Up Bitcoin National Reserves: The Race Begins

The talk about setting up national bitcoin reserves is no longer just a hypothetical idea—it’s becoming a real possibility on the global stage.

Did you know that 13 countries already have bitcoin in their reserves, according to a recent report? Russia is even considering adding bitcoin to its reserves, and there are whispers that other countries in the GCC may be exploring similar strategies.

This newfound interest in bitcoin comes at a time when Donald Trump is serving his second term as US president. Grant McCarty from the Bitcoin Policy Institute believes that Trump’s presidency has sparked a surge in global interest in bitcoin, especially after he named crypto advocate Paul Atkins to lead the US Securities and Exchange Commission.

Bitcoin’s decentralized and borderless nature is what makes it attractive as a reserve asset for many countries. Matthew Pines, also from the Bitcoin Policy Institute, shared that every country is evaluating bitcoin as an emerging geopolitical asset class.

Beyond just holding bitcoin in reserves, many governments are also looking into opportunities in bitcoin mining. While North America currently dominates in terms of bitcoin mining capacity, countries like the UAE and Saudi Arabia are working to expand their mining operations.

For example, the UAE is planning to increase its mining capacity through a $1 billion solar farm dedicated to crypto mining. This move could further solidify the UAE’s position in the crypto mining world.

Bitcoin’s value proposition for countries is evident—it’s decentralized, resistant to external control, and provides a hedge against inflation. For countries in the GCC, relying on bitcoin reserves could help stabilize their economies, especially in times of fluctuating oil prices.

While bitcoin may offer many advantages, including liquidity and borderless functionality, it’s important to note that its volatility is a concern for many. Compared to traditional assets like gold and the US dollar, bitcoin’s annual volatility can reach up to 65 percent, making it a riskier investment option.

Despite these concerns, the idea of bitcoin as a national reserve asset is gaining traction. Trump’s son Eric even expressed confidence that bitcoin could hit $1 million, a sentiment that might encourage policymakers in the GCC to move forward with their plans for a bitcoin national reserve.