Central Banks Buying BITCOIN?! What This Means For CRYPTO!

Ever since El Salvador announced it had Started stacking BTC back in 2021 Everyone has been wondering which Government will be the next to take the Orange pill well what have I told you That central banks around the world Could soon begin accumulating BTC and That some of them may secretly be doing So already that we're already doing it Today we're going to examine the Possibility that central banks could buy BTC when they could do it and what Impact it could have on the market and Your Portfolio let's begin with the Relationship between cryptocurrency and Central banks now central banks first Started paying real attention to the Crypto industry after Facebook unveiled Its so-called crypto project Libra or DM Or Zuck bucks or whatever back in 2022 You see where crypto was created in Response to the 2008 financial crisis Central Bank digital currencies or cbdcs Were created in response to yep you Guessed it cryptocurrency basically the Bank for international settlements or Bis saw the potential that crypto has to Disrupt the financial system pooped its Pants a little bit and started working On cbdcs alongside central banks Themselves however just 3 months before Libra was unveiled bis Chief Austin Kastens had stated that quote so far

Experiment ments have not shown that new Technologies would work any better than Existing ones there is no clear demand For cbdcs on the part of society seems They took quite the U-turn then I wonder Why anyway it's important to understand That crypto and cbdcs are in most cases Unrelated however there are a few crypto Projects who seem to be siding With the Enemy by providing central banks with Fully-fledged blockchains to build their Cbdcs on not going to name names now This is important for reasons we'll come Back to later but for now if you want to Learn more about cbdcs then you can Check out our video below seriously Dystopian stuff anywh who the thing is More than 90% of central banks around The world are actively working on a cbdc In some capacity and according to cbdc Track.org there are already four cbdcs Live today and this is just the start of It according to that same website there Are another 155 cbdcs in various stages of Development at the time of shooting this Video yikes now the Silver Lining is That this means central banks are paying Attention to crypto or at the very least The technology it's built on however Having cryptotech on their radar also Means they could very well be keeping an Eye on cryptocurrencies as well Particularly BTC as it happens this is

Something that's been discussed by Central banks around the world with Varying opinions for example the European Central Bank or ECB hates Bitcoin and has even gone as far as to Say that quote the latest approval of an ETF doesn't change the fact that Bitcoin Is not suitable as a means of payment or As an investment ouch still I suppose We're all entitled to our own opinions Even if they are completely stupid Conversely the Swiss National bank's Chairman Thomas Jordan has discussed its Openness to holding BTC if it believes It can fulfill the role of a reserve Currency give him time folks he'll get There soon enough now this ties into the Reasons why a central bank might be Interested in holding BTC the first Reason why central banks are likely to Start stacking SATs is as a hedge Against inflation for reference a Central bank is tasked with encouraging Economic growth while keeping inflation Under control control this is done by Raising and lowering interest rates Lower rates equals cheaper borrowing More spending and less saving while Higher rates equals the opposite more Expensive borrowing less spending power And more people saving their cash now Inflation can be quite a difficult thing To control because as easy as it is to Print Fiat money it's much harder to

Remove that money from circulation in Fact it's one of the reasons why cbdcs Were created Creed as they can be Programmed to remove chunks at a time Similar to a burn mechanism you find With many cryptocurrencies this can Create deflation at a monetary level This ties into the second reason why Central banks could start holding BTC And that is as a hedge against their own Cbdc bets that's because as time goes on People are becoming increasingly aware Of how dark the future would be if Everyone's money was controlled by one Giant financial institution This means more people are turning their Attention to alternatives to The Current Financial system and as it so happens Bitcoin is its biggest competitor if Central banks don't want to be left Behind they'll want to be holding some BTC as a safety precaution now this Might sound crazy but it's almost Exactly what Fidelity one of the world's Largest asset managers predicted will Happen way back in 2022 in their own Words quote we think there is very high Stakes gain Theory at play here whereby If Bitcoin adoption increases the Countries that secure some Bitcoin today Will be better off comparatively than Their peers meanwhile another reason why Central banks could start holding BTC in Their reserves is as an alternative to

Gold holding BTC would present these Institutions with a few benefits BTC has A lower inflation rate than gold is much More portable is easy to transact with And has minimal storage costs ESP Especially when compared to gold storage This is part of the reason why BTC is Considered to be digital Gold by many Investors now central banks holding BTC As a digital gold Reserve would help Strengthen their theat currencies which In most cases aren't currently backed by Anything for reference the US dollar was Actually backed by gold until 1971 when The gold standard collapsed the US Dollar has been devaluing ever since now The final reason why a central bank Could hold BTC is ironically because of Its decentralized nature that's because Bitcoin cannot be controlled and Therefore cannot be confiscated this is Exactly why some countries have started Using it for international trade for Example in August 2022 Iran's industry Mines And Trades Ministry approved the Use of crypto for international trade Amid sanctions before using it as a Payment method to import $10 million Worth of vehicles to be fair we don't Know what crypto they're using but it's Most likely BTC and in April 2023 Russia Announced plans to start mining BTC for Crossborder trades again due to Sanctions crypto payments within Russia

Are still banned though definitely not Double standards at all so this all begs The question of what needs to happen Before central banks start using Bitcoin Well well first commercial Banks need to Be allowed to hold crypto or rather have Some standards around holding crypto This makes sense when you consider the Fact that central banks are technically Owned by the largest commercial banks in Most countries including in the USA as It so happens the bis is expected to Introduce standards for banks who want To hold crypto on their balance sheets At the start of next year these Standards will give the commercial Banks The ability to hold up to 2% of their Reserves in crypto from the 1st of January 2025 and if you think that 2% Isn't much well consider that JP Morgan And Bank of America alone have almost $7 Trillion in assets under management a Bit of quick maths tells you that 2% of This is $140 billion and I'll remind you That's just two of the many mega Banks Out there however before central banks Can follow suit and embrace crypto with Open Arms the crypto Market needs to be Deep and liquid enough to handle large Transactions without affecting prices This is becoming more likely by the day Thanks to the inflows coming into those Spot Bitcoin ETFs in the US I know I Know you're probably as sick of hearing

About them as we are of talking about Them but they're here to stay folks and There's no getting away from it anyway In all seriousness there's something Else besides liquidity That central Banks need in order to start buying Crypto and that's privacy so that any Buys sells or transfers can't be traced Ah the irony there also needs to be a Better understanding of where their Holdings can be kept if central banks Decide to custody their BTC in one Centralized place then that opens the Doors to a whole world of security Concerns this is pretty ironic too Because centralization is literally what These institutions are designed for Logically then the safest way to store Their crypto would be to admit that Centralization doesn't work before Spreading their BTC across multiple Hardware wallets and the cheapest way They can do that is by visiting the coin Bureau deals page to get a discount on Some of the best in the business anyway Shameless plugs aside there's just one More thing that needs to happen before Central banks can hold BTC like the rest Of the crypto industry Banks need to see Some regulatory Clarity they won't be Throwing money towards crypto at all Until it's deemed legally safe to do so Which is understandable from their Perspective the risks severely outweigh

The rewards now with all that said there Are a few financial institutions that Will likely never jump aboard the Bitcoin bandwagon no matter what happens For instance there's the bis which will Remind you hates crypto more than anyone As they see it quote crypto is not Stable enough to be money and yet yet Something that would have cost you $1 us 100 years ago would cost you $18.34 today hm so much for stability Anyway the international monetary fund Or INF is another institution that will Likely never adopt crypto in fact They're so opposed to the idea that they Actively suggest using cbdcs to fight The adoption of cryptocurrency but Here's the thing it's highly likely that Some central banks have already started Accumulating BTC behind closed doors if You're not convinced then here's Something to consider if there is anyone Who has a deep understanding of the Markets it's the institutions behind Those markets also consider that the Majority of crypto Market analysts Believe we'll see the current bull Market Peak at some point in 2025 now ask yourself do you really Think central banks will wait until Peak Bull market Mania to start AUM ulating Now at this point you're probably Wondering what effects this could have On BTC and the broader crypto Market

Well we'll start with the obvious answer And say that yes number go up this is Hardly surprising considering the Billions of dollars central banks will Have to throw at it anyways the less Obvious effects would be that central Banks could set a floor under btc's Price much the same way they have for Gold this cycle it goes without saying That this assumes that they see BTC as a Safe haven asset like gold or at least a Truly decentralized digital asset worth Accumulating for reference the 20th of May this year saw the price of gold hit An all-time high of $2,450 per ounce this is despite the Rise in interest rates which should have Had a negative impact on gold as some of You will know Central Bank demand for Gold has surged recently to 1,000 tons Annually for the past 2 years more than Doubl the historical average this is due To a combination of everything from Inflation to fears of sanctions from the US and its allies if central banks start To see BTC as a safe haven asset like Gold then they could also step in to Scoop up some BTC as soon as it falls Below a certain level which could set a Sort of price flaw consider that there's Been speculation That central banks were Buying gold at around the $1,700 level Hence why it held at that level when it Dipped in recent times and speaking of

Gold another effect central banks buying BTC could have on the market would be an Influx of new investors as we mentioned Earlier BTC has been outperforming gold For a while and if central banks begin Holding BTC investors who stick to more Traditional assets like gold would be Likely to rotate some of their positions Towards BTC too and by the way if you Want to learn more about how BTC and Gold compare you can check out our video That will tell you everything you need To know the link to that is in the Description anyways as for the crypto Natives just the news of central banks Buying BTC would be bullish AF at least In the longterm however it's likely that In the short term this would signal the Crypto bull market top I mean it's hard To think of an even more bullish Catalyst that could follow when that News gets out even your Grandma will be Asking knew about that Bitcoin thing and When that happens sell everything and Run for the hills no no jokes aside not Everyone will be so thrilled about the News in fact some Bitcoin ogs and Maxis Could see this as such a Negative that They dump some or all of their BTC this Would kind of make sense because central Banks are exactly what Bitcoin was Created to replace BTC becoming just Another tool for tradire could be seen As admitting that the game's already

Over now this ties in to the potential Downside risks Bitcoin could see if Central banks were to start holding BTC The first risk is that number go down Just as fast as number go up the massive Amounts of money that will be flowing Into Bitcoin is obviously great but if That same money were ever to flow back Out again then plenty of people would Get wrecked this is especially true If It creates additional Panic selling Another risk meanwhile is something Going wrong with Bitcoin or indeed The Wider crypto industry if central banks Have any bad experiences with crypto Like another FTX for instance then this Would likely result in stricter Regulations coming into Force now while The industry does need regulating you Can bet your bottom digital dollar that These regulations would be unfavorable They'd also be plastered all over Mainstream media giving crypto a bad Reputation which could turn central Banks off the idea of ever holding Crypto and let's be honest the last few Years haven't exactly seen crypto in the Best light thanks Sam don't drop the Soap will you anyway another risk is That BTC could become even more volatile Than it is already that's because Banks Could print enough money to buy up much Of the BTC effectively removing it from Circulation now the risk here is twofold

First the remain meaning liquid Supply Is more sensitive to any buying or Selling activity which will make btc's Price Less stable and second if the bank Then decides to dump a whole load of BTC Back onto the market then this could Deal out a devastating dip but even if The banks don't start buying BTC they'll Likely leverage crypto in one way or Another the obvious standout here is Stable coins which financial Institutions could leverage in Conjunction with cbdcs heck if cbdcs Fail then centralized stable coins could Even become the go-to alternative so This brings us to the question of what Other cryptocurrencies besides BTC could Be considered by central banks once they Take the orange pill well by far the Most obvious choice here is Pepe it's Got some great Tech Some solid Fundamentals and no no no relax I'm just Kidding in all seriousness if a central Bank was going to extend into other Cryptos then a likely option would be Those that have similarities to BTC so Think perhaps Litecoin or Bitcoin cash For example there could also be Consideration for the teachers pets out There by that I mean the projects that Have been actively working alongside Central banks to develop their cbdcs for Instance xrp could be considered thanks To Ripple who have provided a cbdc

Platform on a separate private Ledger Designed specifically for governments Central banks and financial institutions Another could be Stellar's xlm thanks to Stella's support with creating cbdcs on Its public blockchain albeit with custom Parameters that give these centralized Entities more control over its Governance alternatively rather than Holding physical gold in their reserves Banks May opt for using tokenized gold Such as paas's paxg or tether's Xut this would provide similar benefits To what we mentioned earlier with BTC It's more portable easier to transact With and has much lower lower storage Costs than the real thing which is kept In Brinks vaults in London so long as London remains a neutral Financial Hub This could present a viable alternative However the most likely option of them All would of course be ethereum's eth For a number of reasons first and Foremost it's btc's closest rival by Market cap having sat comfortably in Second place for most of its existence And with spot ethereum ETFs now approved In the US banks are even more likely to Consider e at the time of shooting these ETFs have been approved but haven't yet Been listed let's hope they don't Stumble at the Finish Line because of Something like oh I don't know consensus Getting sued by the SEC and speaking of

Which another reason why ethereum could Be considered is because of consensus in Case you didn't know consensus is behind The metamask wallet and infura a node Provider that powers metamask and many Others besides providing infrastructure For ethereum consens has also been Helping to bridge central banks with Trfi institutions by Building Services On top of cbdc networks all in a Partnership with fintech giant Visa Naturally this is another green tick Next to ethereum's name however this Could be bad for ethereum in the long Run that's because central banks could In theory print enough money to buy up Enough eth to pay for a boatload of Validators giving them power over the Network and making ethereum more Centralized let's hope it never comes to That regardless the banks would need to Hold on to some eth in order to pay for Any network fees and just the news of Central banks holding eth no matter how Small the amount would get those Moon Boys well and truly fired up but well Let's not get ahead of ourselves once Central banks have bought BTC then we Can talk about altcoins and who knows Which ones will be around at that point In Time okay that's just about it for Today's video folks so if you enjoyed it Go ape on that like button subscribe to

The channel and ping that notification Bell so you don't miss our next one if You think others could benefit from this Content then take a second to share this Video with them and if this video has Inspired you to buy BTC whether you're a Central bank or not then be sure to use The coin bureo deals page it's got Trading fee discounts of up to 60% sign Up bonuses of up to $60,000 on some of The best crypto exchanges and discounts On some of the best hardware wallets too The link to that is below thank you all So much for watching and we will see you In the next one until then this is Guy Signing off [Music]

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