r/investing
Bitcoin Act = Expansion of Money Supply and Dedollarization by the U.S Itself
The U.S. BITCOIN Act proposes a strategic Bitcoin reserve funded by revaluing gold certificates, effectively expanding the money supply.
- Establishes a federal strategic Bitcoin reserve to hedge against fiat devaluation.
- Creates a budget-neutral mechanism to acquire 1 million Bitcoin over five years.
- Acts as a form of backdoor money printing by expanding the money supply.
- Could accelerate dedollarization by shifting U.S. reserve strategy.
The U.S. BITCOIN Act (Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act) is a legislative proposal designed to establish a federal Strategic Bitcoin Reserve. It directs the U.S. Treasury to acquire 1 million Bitcoin over a five-year period to create a non-inflationary national asset. The intent is to strengthen the national balance sheet, hedge against long-term fiat currency devaluation, and establish a digital equivalent to U.S. gold reserves.
The main mechanism in Senator Cynthia Lummis’s BITCOIN Act (and related bills) involves revaluing U.S. gold certificates held by the Federal Reserve. Gold is currently booked at the statutory price of \~$42.22/oz (totaling \~$11 billion), while market value is hundreds of billions higher (e.g., \~$750B+ depending on prices). The bill would reissue certificates at market value, with the difference (a large accounting gain) remitted to the Treasury and used to fund Bitcoin purchases in a “budget-neutral” way. This is an accounting maneuver to unlock “paper” gains.
The gold certificate revaluation accounting maneuver would effectively add to the money supply. It is widely viewed as a form of “backdoor money printing” or monetization of an existing asset, though it doesn’t involve issuing new debt or physically printing currency.
How It Works Mechanically
• U.S. gold is valued on Treasury books at the old statutory price (\~$42.22/oz), making gold certificates held by the Fed worth only \~$11 billion.
• Revaluing to (or near) market price (\~hundreds of billions to $750B+ depending on gold prices) creates a large accounting gain.
• The process typically involves:
1. Treasury/Fed exchanging or reissuing certificates at the new higher value.
2. The Fed credits the Treasury General Account (TGA) with newly created reserves/dollars equal to the difference.
• No new Treasury borrowing or debt ceiling impact occurs. The Treasury gains spendable funds in its Fed account.
When the Treasury spends these funds (e.g., to buy Bitcoin for a strategic reserve), the money enters the banking system:
• It increases bank reserves (part of the monetary base).
• As it circulates, it can expand broader money supply measures like M1/M2 through lending and deposits.
You can't grow your economy without inflation. If you want your population to grow, and those people to have money, you need more money to go around. It's basic arithmetic.
You’re right our growth has been hampered by a lack of money supply lately. That’s surely what’s been holding us back!
And you think less money might help? Who do you think is going to hoard it? Those same people!
Yeah, we should be printing more!
With Bitcoin Act, US government is signaling that:
\-It doesn’t have the ability to take actions to reduce inflation. So it seeks protection against the value erosion in its own currency.
\-It will take inflationary actions in the near future. Therefore, it seeks protection from the inflation that their actions will cause.
\-That the US is losing its faith in its own currency.
lmk when you're back from fantasy land lmao
$40 Trillion deficit at a high enough interest payment (just the interest payment on the deficit) to be more than the already insane military budget, and every country is dumping US treasury bonds, despite the increasing rates... yeah that is reality, the USD shouldn't be worth the paper its printed on. This latest stunt might not be enough to save it, but if they raise interest rates, then it'll probably start a recession/depression.
cool then go all-in and short the market lmao
We could put all that money into restocking strategic oil reserves, or strategic gold reserves. Or fix our crumbling infrastructure. Or stave off that looming Social Security insolvency, or improve healthcare and education, and a million other useful things. But instead lets dump it into crypto so we can pump bitcoin price.
It's equivalent to gold
Except is has no intrinsic value and no industrial use. Get out of here with this garbage.
The president and his family has a private interest in crypto assets. So the Bitcoin Act will serve the purpose of enriching them.
Agreed, them and every other congress critter involved in pushing this nonsense through.