Could Bitcoin Bankrupt The US Government?

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In this video, I discuss the doom loop that could be set into play if enough entities sell off some of their US Treasuries and buy BTC with the proceeds.

By doing so, they marginally push up the price of BTC vs the US dollar, thus attracting more people to Bitcoin– while at the same time pushing down the price of US government bonds, and thus increasing the interest rates at which the US government is forced to borrow.

If the Federal Reserve, as the buyer of last resort, steps in to buy these Treasuries that no one else wants, it must do so with freshly printed USD, which further strengthens BTC against the USD, thus creating more and wealthier Bitcoiners.

The only way for a highly-indebted government to protect itself from this kind of doom loop is to buy BTC and hold it in government coffers.

Remember to vote with your own money and think long and hard about what entities you choose to fund with it.

I’ve chosen Bitcoin, the neutral and ethical money for 8 billion people.

Not investment advice! Consult a financial advisor.

Watch these 2 videos first:

Why Russia and Japan are not buying more US Treasuries:
https://www.bloomberg.com/news/articles/2024-02-21/seizing-frozen-russian-assets-over-ukraine-war-wins-endorsement-of-legal-experts
https://www.bloomberg.com/news/articles/2024-01-22/yen-near-150-per-dollar-stokes-speculation-over-intervention

How much Bitcoin owned by corporations:
https://bitcointreasuries.net/

Apple’s holdings of US Treasuries:
https://d18rn0p25nwr6d.cloudfront.net/CIK-0000320193/a4b40e13-bf4b-47bc-b2fe-e5ccd72f5815.pdf

I am not being paid or otherwise compensated by any company or cryptocurrency project that I mention in my videos. My opinion is not for sale. Please do not contact me with any affiliate or advertising deals.

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#crypto

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This is Matthew crder from Bitcoin University today I wanted to answer the question could Bitcoin bankrupt the US government this is a question a number of you have asked and this is a followup to my two previous videos about the US government launching a 6102 attack on bitcoin and confiscating Bitcoin from

Coinbase another large us-based custodian so be sure to check out these two videos which I’ll link to in the description notes below now when President Roosevelt when FDR issued executive order 6102 in 1933 and confiscated the gold of so many Americans the US dollar was essentially

Backed by gold at the time so the question remains what could possibly be the rationale for US Government 6102 attack on bitcoin over the next 10 years as I postulated especially since the US dollar is not currently backed by Bitcoin in the same way that the US

Dollar was backed by gold in 1933 so I think this is a very good question a number of you asked why might Bitcoin be a threat to the government in order to answer that we’re going to do a simple thought experiment Joe owns in his retirement portfolio let’s say that Joe

Owns 50% stocks 50% us treasuries which are just US government bonds and then this year in 2024 he decides he’s heard all this news about Bitcoin he decides to allocate 1% of his portfolio to bitcoin either to the ETF or to buying real BTC so he sells off that 1% of his

Portfolio that’s sitting in treasuries and he buys Bitcoin with it so let’s think through this what’s the marginal effect of his actions on these markets well Bitcoin gets a little bit stronger against the US dollar because he’s selling US Dollars and buying Bitcoin so Bitcoin goes up a little bit at the

Margins of course it’s very very small for an individual but we’re just talking about buying pressure because prices are always set at the margin so because he’s selling US dollars he basically sells treasuries gets US Dollars and then sells those US dollars for Bitcoin this drives Bitcoin up a little bit and the

US dollar down a little bit now if enough people do this when Bitcoin keeps going up more and more people get interested in bit Bitcoin and more and more people become bitcoiners this is number go up technology this is what attracts a lot of people to bitcoin

Initially also the other piece of his trade by selling some us treasuries to raise funds to buy that Bitcoin with Joe is also pushing up treasury yields at the margin again he’s a tiny player presumably but if enough people do this and again price is set at the margins it

Can have an effect so bond price is down because he’s selling treasuries yields up marginally on these treasuries so the US dollar is being marginally weakened against Bitcoin and the interest rate at which the US government must Finance itself are forced slightly Higher by Joe’s actions and you don’t have to just

Apply this to the US dollar you could apply this to any local fiat currency and government bonds if you’re enjoying this video so far I just ask you to hit the Subscribe button that really really helps hit the like button leave a comment question suggestion for a future

Topic also share this video with a friend or family member so this this is just Joe we’ve been talking about dumping his treasuries and buying Bitcoin and again by doing that he drives up the price of a Bitcoin on the margins and he drives down the price and

Drives up the yield of treasuries making it more expensive for the US government to borrow so that’s just Joey doing this on a very small scale now let’s talk about micro strategy which has been doing this over the past few years a couple years ago Michael sailor had a

Choice what to do with his large amount of cash he had a choice of whether to put it into US treasuries I’ve heard him talk about this on podcast or put it into Bitcoin if he’ put it into treasuries he’d be down 30 40 50% on those long data treasuries just like the

Banks are and the insurance companies are instead he put it into Bitcoin and this was a lot of money we’re talking about his cost basis on bitcoin is almost $6 billion so that’s 6 billion dollars that went into Bitcoin and did not go into us treasuries now we’re

Beginning to talk about some real money and real impact on the marginal pricing of Bitcoin versus US Dollars and us treasuries as well now let’s imagine that Tim Cook sees what Michael sailor’s been doing and he decides to do something similar at Apple maybe not this year but maybe next year it’s a

Natural fit apple and all of its forward-looking technology and Bitcoin with its forward-looking technology so let’s say Tim Cook decides to sell off that 24 billion uh in US treasuries that apple is holding and puts that into Bitcoin this has a much larger marginal effect it drives up the price of Bitcoin

And it also would drive down the price of treasuries and make it more expensive for the US government to finance itself the important thing to remember is that someone always has to be holding a bond before it matures or is retired it can’t just be left in the wood somewhere if

You sell it you have to sell it to someone so if Joe or micro strategy or apple is selling off some treasuries someone else has to be buying them that’s not going to be Russia or China at this point in time after the Russia sanctions it’s probably not going to be

Japan either which has been selling off its US Treasury Holdings in order to try to defend the Yen there’s this article in Bloomberg today seesing Frozen Russian assets over Ukraine War Winds endorsement of legal experts they probably didn’t consult any Russian legal experts but the larger Point here

Is not political the larger point point is that this makes people less willing on the margin to want to hold us treasuries if they can just be Frozen at any time and again we talked about Japan trying to weaken the dollar a little bit by selling its treasuries and prop up

The Yen so these are two buyers these are historical buyers of treasuries that aren’t really buying anymore Russia China and Japan so who is going to be the marginal buyer of this toxic government waste called us treasuries as we said someone has to hold this junk but unfortunately it still offers a

Yield that’s well below the true rate of inflation CPI inflation I believe now is below the yield on the 10-year treasury note but that is not a true measurement of inflation if you go to the grocery store if you’re spending money in daily life you know that the true rate of

Inflation is much higher than three or 4% so these us treasuries across the curve they really offer a yield below the true rate of inflation so if you hold them you’re constantly losing purchasing power over time and then of course if the US Treasury decides that you’re bad whatever that means at any

Point in time and at various points over the last 50 60 years the US has probably said every single country on earth is bad if the US Treasury decides that you’re bad it will freeze your treasuries and refuse to pay interest or principle and at some point every

Country on Earth has been considered bad as we said by the US government so if you’re a sovereign buyer of us treasuries you have to ask yourself do you feel lucky kid so if no one wants to buy us treasuries on the margins then then you have to bring in the Federal

Reserve which is always the buyer of Last Resort and the fed’s main job this last decade has been to print up huge amounts of fresh US Dollars and buy treasuries with it in order to help to finance huge federal budget deficits so if Joe micro strategy apple and others

Are selling their treasuries the FED is going to need to be buying even more treasuries at the margin as the buyer of last result and again remember that Joe micro strategy and apple are selling their treasuries on the margins to buy Bitcoin so this directly puts pressure

On the FED to buy more treasuries if the fed’s going need to be buying more treasuries at the margin the FED will also need to be printing up more US dollars at the margin to buy these treasuries with so then we have to ask ourselves what happens to bitcoin when

The FED prints fresh US Dollars mucho US Dollars only 21 million Bitcoin and so bitcoin’s price in US dollar appreciates as it has been doing since 2009 or 2010 this attracts more buyers and creates more long-term bitcoiners who end up dumping their government bonds or treasuries for Bitcoin as well so this

Is really the problem this is the Doom Loop that weakens US dollar and or defunds the US government by driving rates interest rates too high if the FED doesn’t intervene but if the FED does intervene it weakens the US dollar against Bitcoin and against other currencies if you want to see long data

Treasuries being replaced by Bitcoin as a savings technology and Global Reserve asset all you need to do is take a look at this chart which is breaking out when this chart moves higher that means Bitcoin is strengthening against us treasuries long data treasuries as expressed by the ETF TLT when the chart

Is moving down Bitcoin is weakening but we can see here it’s breaking out to new multi-year highs and this is really Bitcoin eating the world and eating treasuries as a global Reserve asset and it hasn’t even started yet this is just the very very beginning so now you can

Probably see why the US government might be interested in doing a 6102 attack at some point in the next 10 years it’s really the only way to survive if America’s biggest export which is toxic government paper treasuries is being replaced by Bitcoin the US used to export real things now just ports pieces

Of paper called us treasuries so this the only way the US can survive if it’s being replaced if its biggest export is being replaced by Bitcoin so if you’re interested in playing along at home this is what you can do you can sell some of your your US government bonds and buy

Bitcoin with the proceeds that’s not investment advice of course don’t go crazy with it instead consult your financial adviser have a real chat with them maybe let them know that you’re tired of funding the US government and its Wars and its degeneracy and that you’d like to revoke your loans to Uncle

Sam and no matter what country you live in you can do this in your own country as well if you’re in Russia if you’re anywhere else in the world and you don’t like your government you can defund them the least you can do is don’t hold their

Paper and don’t give them funding if you’re in the US you can dump your fed tokens in other words US Dollars these terrible Fiat tokens and you can dump your government paper us treasuries and you can move your family’s economic life energy into ethical money like Bitcoin money that’s not controlled by bankers

And Suits it’s fine if you want to still play the game called voting but before you do that be sure to vote with your money first because what the US government listens to more than anything else is money and you don’t want to be funding an organization that you don’t

Really like or respect postcript what’s the best way for a government like the US government to be able to defend itself against this kind of attack you won’t be surprised actually that that government needs to buy and huddle Bitcoin because if a country has a lot

Of Bitcoin it doesn’t have to worry as much about these Doom Loops kicking in but can rather benefit from them at the expense of other countries who do not own Bitcoin so while China and Russia are accumulating a lot of gold I would suggest that the US government really

Starts to accumulate Bitcoin that would be a very smart geopolitical play and I don’t know whether to wish that they do that or wish that they don’t but I do think that it’s inevitable and if they want to prevent a doom Loop like this from happening they’re going to have to

Buy a lot of Bitcoin in fact everyone in the world is going to have to be buying a heck of a lot of Bitcoin in the coming years whether they want to or not the US government May hate Bitcoin but it may still be forced for geopolitical and

Geostrategic reasons to buy a lot of Bitcoin make sure you’re ready for this because these are the really big nation state and Central Bank buyers coming in and they will dwarf even Wall Street if you enjoyed this video be sure to hit the Subscribe and like buttons hit the

Notification Bell if you want to be notified when I publish my next video and let me know your questions and comments in the comment section below thanks allot for watching and I’ll see you in the next video