Investment strategist Lyn Alden said in an interview with Peter McCormack on What Bitcoin that the current geopolitical tensions in the world may cause some nations to start taking bitcoin more seriously:
“In theory, this increases the demand for reserves that cannot be blocked. Primarily gold, because it is liquid, less volatile, and already owned by central banks with a total estimated market capitalization of about $12 trillion. The longer you look into the future, the more attractive bitcoin becomes as a reserve asset.”
Alden added that sovereign wealth funds with a higher risk appetite than central banks will be the first to start hoarding BTC. Alden argues that with more players in the market, huge liquidity and less volatility, the ground can be set for central banks eyeing the flagship crypto-asset.
“By their nature, central bank reserves should be very conservative, in currency or gold. Whereas sovereign wealth funds can buy assets like stocks. Some central banks buy stocks, too, but more often than not they are government fund stocks,” the economist said.
Alden added that the more widely bitcoin spreads, the more liquidity it has. And that means the more often central banks will view it as a viable mutual reserve asset. First, it cannot be unilaterally blocked by a third party, and second, bitcoin can be used to circumvent sanctions and international transactions.
Analysts at the financial firm Deloitte are also of the opinion that the Central Bank will use bitcoin. They argue that BTC has the potential to guide the global development of central banks’ own digital currencies. Last week, FBI executives stressed that the U.S. has vast experience in tracking cryptocurrencies, and Russia would not be able to use them to circumvent sanctions. A senator from Massachusetts is going to submit a bill to Congress blocking the ability to fight anti-Russian sanctions with crypto-assets.