Bitcoin’s recent struggles speak against the notion of it being held as an asset by the United States Treasury, argues the co-founder and CEO of Cerus Markets, a cryptocurrency exchange. Michael Brescia made the comments as Bitcoin shed nearly 18% of its value in one day.
“The brutal sell-off we’ve seen in Bitcoin over the weekend should serve as a warning to those suggesting and celebrating the idea of holding BTC as a US treasury asset,” Brescia began. “Further downside is expected throughout the US session. This compares to a slide of 2% for gold – which currently comprises close to 70% of U.S. central bank holdings.”
Brescia said the central bank’s gold holdings were gained from Europe in exchange for financing WWII. They are among the highest percentages of national reserves for any country in the world. That is one of the principal reasons – along with the strength of the U.S. dollar – that the U.S. remains a safe haven for investors.
He compares this with Japan, which only holds 4.3% of its reserves in gold. It recently marked one of the worst days for its stock market in history as investors responded poorly to an untimely interest rate hike.
“We are entering a questionable period for stock markets, one which some have been predicting since inflation reared its head again, and fears of a global recession are mounting,” Brescia said. “Whether or not this materializes, we can be thankful that U.S. reserves are not linked to Bitcoin. Bitcoin is a high-risk asset, and if we’re not talking about putting other high-risk assets in the national reserve – like the stock of the world’s biggest company Apple, also down 5% today – why would we be talking about putting Bitcoin in there?
“One day, Bitcoin may well become bigger than gold, but today it is not even one-fifteenth the size. As such, there is a long, long way to go before we should even contemplate including such a volatile asset in our national reserves.”