Over the past few years, Bitcoin has been gaining a lot of popularity and has been accepted in many countries around the world. However, it is still considered that the adoption of Bitcoin is still in its infancy, and every country in the world will take time to accept it.
Can Every Country Match Its Gold Reserves to Bitcoin?
If we take the current value of Bitcoin, which is around $20,000, it is almost impossible for countries to match their reserves with Bitcoin. The reason is: the total gold and foreign reserves held by 160 countries is $15 trillion, which is 39 times larger than the current $20,000 20,000 coin Bitcoin market capitalization.
In theory, 750 million bitcoins would be needed per country to replace their gold and foreign exchange reserves with BTC. And even a 3 percent allocation represents around 22.5 million BTC, which is more than the total number of BTC in circulation.
Another reason to do this is that not every bitcoin is available for sale, and it is estimated that around 3.7 million BTC coins were lost after the development. This brings the current supply of the cryptocurrency to nearly 15.5 million.
What is the best approach?
However, a better approach is needed as approximately 3.8 million bitcoins were not available for sale over the past 3 years, meaning that the owner was at a sub-$4,000 crash as well as a peak of $69,000. So the total number of coins currently in circulation is around 11.7 million, which means that the minimum price for a 3% allocation would be around $38,500 per coin.
The countries have taken the price mark of 38,500 dollars as the end and every bitcoin that has been circulated in the past few years has been put up for sale, then taking into account the foreign exchange and gold reserves of each country; China needs a total of 2.67 million BTC, Japan needs 1.1M BTC, while Switzerland has 864,800 BTC corresponding to its gold reserves. However, Bitcoin adoption is still in its infancy, and it will take years until the numbers become reality.
What are your thoughts on the current price of Bitcoin? What do you think of any government equating its gold reserves with BTC? Let us know in the comments below. And, if you find our content informative, share it with your family and friends.
Also read: Anchorage co-founder says “lack of clarity” on crypto regulation in US.
