Trump Re-elected: Bitcoin, Oil and Gold in the New Deal Economic Era

Produced by OKGResearch

Author｜HedyBi

At 1 a.m. on January 21 (Beijing time), Trump officially took office as President of the United States again. But just two days before he took office, the market ushered in an event that attracted global attention: Trump issued a TRUMP’s 100x coin. This meme coin, which has no technical foundation and is entirely based on personal brand, once had a market value of more than 8 billion US dollars in just a few days. A successful narrative can generate consensus, and consensus is an important part of the market.

In this context, Bitcoin, as the founder of cryptocurrency, and its increasing market influence can’t help but make people think, is Bitcoin in today’s era just a “peer-to-peer electronic cash system”? Whether Trump proposed to regard Bitcoin as a national strategic reserve or some countries have listed Bitcoin as legal tender, Bitcoin is gradually being regarded as one of the potential entities of "global strategic assets". Is such a proposal just a matter of scarcity due to Bitcoin’s fixed supply? We can find its deep meaning from history.

Oil and gold: cornerstones of national strategy

Looking back at history, it is not difficult to find that energy and precious metals have always been the core guarantee of national economic security. The 1973 oil crisis forced the United States to establish the Strategic Petroleum Reserve (SPR) to provide protection against supply chain disruptions. To this day, the United States is still one of the world's major oil reserve countries. Its strategic oil reserves have been stable at about 700 million barrels for a long time, accounting for 15% of global reserves.

Gold is another older strategic reserve asset. After the disintegration of the Bretton Woods system, although the US dollar was decoupled from gold, the status of gold has never been replaced. As a symbol of wealth and credit, gold remains one of the main reserves of central banks around the world. The United States currently holds approximately 8,133 tons of gold reserves, accounting for 23% of the global total. This provides additional stability and credibility to its financial system and strengthens its core position in the global credit system.

The reason why these two assets can become strategic reserves lies not only in their physical attributes (scarcity and practicality), but also in that they carry the core trust of the economic order : oil is the blood of industrial operation, while gold is the last resort of the monetary system. Line of defense.

In the traditional economy, the country's strategic reserves mostly rely on physical assets such as oil and gold. The value of these assets is usually closely related to their scarcity, availability and market demand. However, with the advancement of technology and deepening globalization, the limitations of physical assets have gradually emerged. According to the latest data from the World Gold Council, gold will have a net outflow of US$4.865 billion in 2023.

What we have to think about is what characteristics a new generation of national strategic reserves needs in the technological era. In the era of science and technology, are national strategic reserves still in the form of “physical assets”?

Bitcoin: A new strategic reserve in the technological era?

The need for "trust" in the technological era has undergone profound changes. Traditional trust systems rely on the guarantee of governments, banks or other central authorities, while Bitcoin proposes a decentralized trust mechanism - without relying on a single institution or government, its value is determined by countless market participants around the world. mutually recognized and sustained. Because of this, Bitcoin has the characteristics of breaking geographical and political boundaries, and can transcend the limitations of traditional physical assets to achieve global value storage and exchange.

Different from the craze of Trump Coin ($TRUMP), $TRUMP is a meme coin with no technical foundation. This is one of the types of cryptocurrencies and represents more peripheral attributes such as the fan economy. However, the market sentiment and participation enthusiasm it stimulated in a short period of time revealed the new rules of market operation and made us pay more attention to the value of consensus. Whether it is the love of fans, the consensus of FOMO emotions, or the consensus based on mathematics and algorithms, just like the original Bitcoin, as long as there are people around the world using it and trusting such consensus based on algorithms and mathematics and open and transparent ledgers, it will will have its own value.

Compared with the "national strategic reserve" of physical assets, Bitcoin carries the scarcity and value storage properties of gold, and has global circulation potential similar to oil. More importantly, unlike oil or gold, the value of Bitcoin does not rely on the promotion of a certain country or institution, but is constructed by the beliefs of countless market participants around the world. The industry has observed that Bitcoin is evolving from a "decentralized technology experiment" to a "global strategic asset."

This global trust foundation that is not restricted by geographical and political boundaries is the foundation of a new type of national strategic reserve in the technological era, and it is also society's exploration of future trust mechanisms.

The United States’ existing layout for Bitcoin

Judging from the existing strategic reserve layout of the United States, its high proportion of oil and gold strategy reflects its pursuit of global economic dominance. Currently, the United States’ gold reserves account for 23% of the world’s total, and its oil reserves account for 15% of the world’s total. These data show that the United States maintains a high degree of control over the financial and energy systems through centralized resource allocation.

At present, the U.S. government has not announced to directly hold Bitcoin as a strategic reserve, but the private sector’s deep participation in the Bitcoin ecosystem is becoming the focus of global attention. For example, U.S. financial and technology listed companies such as Tesla and MicroStrategy publicly hold Bitcoin, and some U.S. states such as Pennsylvania are considering establishing Bitcoin reserves. U.S. investors indirectly hold Bitcoin through trust funds and ETFs. There is Bitcoin. According to incomplete statistics from OKG Research, as of January 20, the public sector in the United States holds about 1% of Bitcoins, and the private sector holds about 9% of Bitcoins (decentralized exchanges and centralized exchanges cannot access data due to lack of IP address data). Including), the United States holds about 10% of Bitcoin in total, and 90% is in the private sector. And the momentum for the private sector to accumulate Bitcoin continues. BlackRock noted that rising fiscal deficits and debt stress have boosted Bitcoin’s appeal as an alternative reserve asset, especially among institutional investors. Compared with gold and oil, there is still much room for growth in public sector holdings.

No matter what method is used to reserve assets for crypto-assets such as Bitcoin, this is not only a matter of quantity, but also a matter of how countries explore the upgrading and reconstruction of future financial systems in the global technological era.

From "decentralized technological experiment" to "strategic asset in the technological era", Bitcoin represents not only the financial application scenarios of blockchain technology, but also mankind 's bold exploration of new trust systems. Will the future of Bitcoin be as deeply embedded in the lifeline of the country's economy as gold and oil? The final answer may depend on how quickly the global economy embraces new digital trust and the strategic vision of major economies.