Letter #12: Bitcoin and the Sovereignty of Nations
In his bestselling book on the bullish case for Bitcoin, “Bitcoin: Hard Money You Can’t F*ck With”, author Jason Williams makes a candid argument for why Bitcoin will become the world’s preferred reserve currency and asks the following:
Who’s the first to announce a Bitcoin reserve as a legitimate inflation hedge against the dollar? … One day a legitimate nation-state will announce a Bitcoin reserve and it will shock everyone … the first legitimate nation-state to adopt Bitcoin as a reserve asset will reap the rewards.
It’s likely that Williams and many of his readers believed that the open adoption of Bitcoin as a reserve currency by any country was likely still a few years away. After all, it has been less than a year since Microstrategy came out as the first corporation to adopt Bitcoin as its primary treasury reserve asset. And while that practice has been followed by several other corporations around the world, widespread corporate adoption of Bitcoin remains several months, or even several years, away as regulators worldwide continue to warm up to Bitcoin and its immense value proposition.
It likely came as a surprise then to many when El Salvador’s President, Nayib Bukele, announced by special message during the Bitcoin 2021 conference held in Miami Florida, that his nation’s congress would shortly vote on a bill to make Bitcoin legal tender within the country, equal in supremacy with the U.S. Dollar alone (i.e., the only other legal tender within El Salvador). Within days El Salvador’s congress had voted on and passed the Bitcoin law, forever changing for the better the trajectory of El Salvador and its people and further proving the bull case for Bitcoin as a reserve currency and as a store of value.