Bitcoin has formally entered its sovereign state era
Sovereign states aren’t coming — they’re already here
Apoint/Shutterstock modified by Blockworks
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Bitcoin is writing history as we speak.
Blockworks’ newest podcast Supply Shock now actively connects the dots between the current state of Bitcoin and its tumultuous timeline — all anchored by the unique perspective of its host Pete Rizzo, the Bitcoin Historian.
So, let’s get you up to speed with the three most memorable moments in Bitcoin from the past week:
Uncle Diamond Hands
It’s happening: The US government officially holds bitcoin as a reserve asset.
Could last Thursday’s executive order have been more bullish? Maybe. The Strategic Bitcoin Reserve will, in the beginning, only hold bitcoin seized in criminal and civil cases — a list that presumably includes Silk Road, which Arkham puts at 198,109 BTC ($16.64 billion) in total, though it’s likely much less.
That’s more than 40 times larger than the separate Digital Asset Stockpile to be composed of seized coins other than BTC, which today amount to about $419 million.
Still, the order authorized the Secretary and Commerce Secretaries to develop “budget-neutral strategies” to actively buy bitcoin in the future, as long as taxpayers don’t foot the bill. Key officials have already said they are actively exploring the idea through at least two government agencies.
The same can’t be said for other cryptocurrencies — with the executive order stating the government will not acquire more assets for the Digital Asset Stockpile outside of forfeiture proceedings.
No. Second. Best.
11th hour in Utah
The Utah Senate passed the Bitcoin-focused bill known as HB230 by a 19-7-3 vote on Friday — which should’ve allowed the state to create its own strategic bitcoin reserve.
Lawmakers pulled the key provision effectively at the last minute. Had they not, Utah might’ve become the first US state to actively buy bitcoin.
Initially, the bill had made room for the state treasury to invest up to 5% of certain funds into digital assets, including accounts related to state disaster recovery and income tax fund budgets, among others.
The catch: the treasury could’ve only bought coins with a market cap above $500 billion, averaged over the last year. Bitcoin is the only cryptocurrency that fits that definition right now, so the bill was largely considered a move towards a de facto strategic bitcoin reserve.
There’s good news. The bill enshrined certain rights for Bitcoiners into law, including the right to mine, self-custody and run nodes. Other provisions allow for staking, including for coins other than bitcoin, while devs will be able build software on blockchain rails without shirking money transmitter laws.
All well and good. But at least the state bitcoin reserve dream is still alive in more than a dozen states including Arizona, Texas, New Hampshire, Oklahoma, Florida and Georgia.
Five states have so far rejected related bills.
Hydro-powered by Bitcoin
The Kingdom of Bhutan is a Buddhist Bitcoin whale that’s been mining since as early as February 2021.
Last week, we were blessed with the first known interview with Prime Minister Tshering Tobgay about the kingdom’s mining operations, which aim to offset declining tourism revenue. “There are hundreds of people who have made billions of dollars on the back of Bitcoin. Why aren’t governments doing more?” Tobgay told Al Jazeera.
“We have used bitcoin for health — to provide free healthcare, for [the] environment. But these are minor. The main use of Bitcoin has been to finance the salaries of public servants.”
A Blockworks analysis last September found Bhutan was raking in up to $4.9 million BTC per day and in total had generated 27,727 BTC up until that point, valued at nearly $2.3 billion at current prices. At the time, the government may have netted around $578.5 million from selling its mined coins over time. Its wallets currently contain 10,635 BTC ($876 million), per Arkham.
And when asked whether the Bhutanese will one day make bitcoin offerings to Buddha, the outlet said that Tobgay thinks the world is “heading inevitably towards using and exchanging bitcoin just like any other currency.”
I couldn’t have said it better myself.
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