Morgan Stanley believes that Bitcoin is now large enough to be considered an international reserve currency.
In short
- Morgan Stanley estimates how many BTCs the United States should accumulate with regard to the weight of other international reserve currencies.
- The dominance of Bitcoin goes back against altcoins, but not yet in front of gold.
BTC: the next international reserve currency
The news did not make a big noise that the report is not public. Only a few extracts are available online, but the main thing is there. The large investment bank believes that Bitcoin can become an international reserve currency.
Morgan Stanley argues that the United States should hold the equivalent of $ 370 billion in Bitcoin if the latter was to become a reserve currency in its own right. Or about 18 % of Bitcoin market capitalization (~ $ 2,000 billion).
This projection establishes a parallel with the way in which central banks manage the exchange reserves. According to the IMF, the dollar currently represents 57 % of world reserves for foreign currency. The euro is second, at 20 %. The Japanese yen and the pound sterling, as well as some other currencies share the rest.
In fact, the greenback represents only 42 % of world reserves if you include gold. The United States has about $ 600 billion. Or 17 % of all global gold reserves ($ 3,500 billion in gold).
As a reminder, senator Cynthia Lummis suggests buying a million bitcoins. It would cost $ 100 billion, 3.7 times less than what Morgan Stanley suggests (3.7 million BTC)…
If the senator does not achieve her ends at Congress, let us also recall that the presidential council on cryptoactives must put by July 22 a strategy aimed at accumulating bitcoins without encroaching on the budget.
In other words, the United States has already made bitcoin its reserve currency. The only question is: how many BTCs? “As much as possible”according to the White House advisor Bo hines…
Bitcoin, dominance and barbaric relic
Gold has not said its last word. The yellow metal now weighs $ 20,000 billion, up 86 % since the end of 2023. Central banks bought more than a thousand tonnes last year.
But the whole world will soon realize that Bitcoin is infinitely higher. Its money supply is fixed (21 million) while it is extracted each year always more gold. Not to mention the fact that Bitcoin is a payment network at the same time as a reserve of value, two-in-one. Gold does not circulate on the internet.
We will see more clearly when all cryptocurrencies (XRP, Ethereum, etc.) will have collapsed. The process is underway with an Ethereum down almost 80 % against the BTC since August 2022.
Here is where the main cryptocurrencies are compared to their record against the dollar:
Bitcoin pastiches still represent still $ 970 billion (if we exclude stablecoins that weigh $ 246 billion). All this money will end in Bitcoin sooner or later, as well as a good part of the $ 20,000 billion still invested in gold.
The dominance of Bitcoin is currently returning to 66 %, its highest level since January 2021. We could quickly go up above 70 % if Bitcoin exceeds its historic record of $ 108,000.
And if Washington sells gold to buy bitcoins, things could go very quickly …
Don't miss our article: Should you buy gold or bitcoin?
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