International Man: Since its inception in 2009, the US government has been largely hostile toward Bitcoin—but that changed dramatically with Trump’s victory in the 2024 election.
For the first time, the leader of the world’s most powerful nation is openly pro-Bitcoin.
What’s your take on this remarkable shift?
Doug Casey: Maybe Trump was brought around to appreciating the merits of Bitcoin by his association with Silicon Valley tech guys and various Bitcoin bros. The recent creation of Trumpcoin has added a couple of billion to his net worth and undoubtedly cemented his enthusiasm. Although, like 99% of the zillions of meme coins out there, Trumpcoin appears to serve no useful purpose and has zero tangible value.
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Bitcoin, on the other hand, has real value—even though it’s just a mathematical construct floating in the ether. In today’s world, Bitcoin is a reasonable money. Through the last 5,000 years of history, gold has been money, followed by silver and, to some degree, copper. We can now add Bitcoin to that short list.
Let me take a moment to review what constitutes a good money, which has six essential characteristics. It must be durable, divisible, convenient, consistent, usable, and limited.
It must be durable. That’s why we don’t use wheat as money. Gold is ultra-durable. So is Bitcoin, barring a catastrophic collapse of the electrical grid and the internet—a very small but real danger.
It must be divisible. That’s why we don’t use artwork as money. Gold is highly divisible; Bitcoin, as a mathematical concept, is infinitely divisible.
It must be convenient. That’s why we don’t use lead as money. Gold has a very high unit value, but in today’s computer-oriented world, where everybody is umbilically attached to an electronic device, Bitcoin passes that test and is arguably superior.
It must be consistent. That’s why we don’t use real estate as money. As an element, every piece of pure gold is chemically identical. As a mathematical concept, each Bitcoin is just like every other. Since the weight and purity of gold has to be assayed, however, Bitcoin is arguably superior.
It must have use value. This point is why I was a late adopter of Bitcoin; at first, I couldn’t figure out what you could use it for. It took me a while to realize it’s more easily transferable than gold. However, its sole use is as money, and it’s increasingly being accepted as such.
It must be “hard.” That’s a term Nick Giambruno likes to use, meaning that it can’t be created out of thin air, which is why fiat paper is a poor money. It’s why gold is a good money, and Bitcoin is arguably an even better money. That’s because the supply of Bitcoin is mathematically fixed, while the supply of gold can grow through mining.
So, back to answering the question: Why has Trump, at least as an individual, shifted his view toward Bitcoin? I’d say (even though much of Trump’s thinking defies logic), he sees that Bitcoin makes logical sense. Bitcoin is a satisfactory money.
International Man: Recently, President Trump signed an Executive Order establishing a Strategic Bitcoin Reserve.
The plan is to retain 100% of the Bitcoin currently held by the US government—approximately 208,109 BTC (roughly $20 billion), or about 1% of the total supply—along with all future acquisitions for the reserve.
What do you make of this development?
Doug Casey: Well, it doesn’t make a lot of sense when the government has an officially acknowledged debt of about $37 trillion, which is growing by $2 trillion a year.
Of course, that’s just acknowledged debt. When you add in various unofficial, contingent, and hidden liabilities, the US government is really underwater, more like $200 trillion. Having a strategic Bitcoin reserve is trivial in the big scheme of things.
We should also ask how the government acquired that Bitcoin.
Almost all of that has been confiscated from people like Ross Ulbricht, who were simply transacting business in Bitcoin. We can argue that the US government’s “strategic reserve” is based on stolen Bitcoin. An increasing amount of the government’s income is from uncontested and unadjudicated property seizures. That’s a very bad trend.
International Man: Do you think other nation-states will follow the US’s lead and begin accumulating Bitcoin as a strategic asset? Do you think the growing trend of governments holding Bitcoin as a reserve asset will weaken the fiat currency system? If so, what could be the broader implications?
Doug Casey: Almost every government in the world is bankrupt, meaning its liabilities significantly exceed its assets. Holding Bitcoin as an asset, instead of using it to pay off debts, amounts to speculating in Bitcoin. Should government officials have that power? That’s apart from the fact that we don’t want or need a currency “backed” by Bitcoin, just as we don’t want a government currency “backed” by gold. The proper approach is to cut out the unnecessary and dangerous middleman and use Bitcoin, gold, silver, or whatever themselves directly as money.
Does it make any sense for governments to hold significant amounts of Bitcoin or gold? No, not really. Not beyond what’s needed for the normal conduct of its limited duties. Governments should hold a minimum of assets.
This naturally brings us to a very basic question: What’s the purpose of government?
Government is pure force and coercion, and those things should be limited. It’s argued, therefore, that government should only have a military to defend its bailiwick from outside aggression, a police force to defend citizens from criminals inside the country, and a court system. There’s no reason for government involvement in economic activities, including accumulating assets.
Government assets have necessarily been taken from the people by taxation or confiscation. Contrary to the popular meme, government isn’t “We the People”. It’s better viewed as a dangerous predator. As such, it’s best to limit the government to a minimum of everything and anything. I realize that most people will think it’s an outlandish concept, but government should be strictly held to the three functions that I just mentioned.
Anything that helps dethrone government fiat currency is a step in the right direction.
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Government should not be in the money business. Just as it should not be in the education business, the food business, the transport business, or any other commercial activity. Its proper sphere is defense, police, and the courts. And one can argue—I certainly do—that those things are so important to the conduct of a civil society that they shouldn’t be left to the state (here’s the link to The Market for Liberty).
International Man: Now that Bitcoin has been established as a strategic reserve asset, where does it go from here? What are the investment implications?
Doug Casey: From a strictly investment point of view, forgetting about what “should” happen, Bitcoin is going higher. For better or worse, the US and other governments’ accumulation of Bitcoin will put a lot of new buying pressure under a mathematically limited supply.
Bitcoin is becoming more widely recognized as being of value. It will be widely accepted as a viable money.
Even though it’s crowding $100,000, it’s going higher. As is gold.
Reprinted with permission from International Man.
