As a seasoned researcher with a background in finance and economics, I find Andrew Sorrell’s proposal for a strategic Bitcoin reserve intriguing. Having closely followed the cryptocurrency market for years, I have witnessed its volatility but also its potential as a hedge against inflation and a means to diversify portfolios.
Andrew Sorrell, the Alabama State Auditor General, has added his voice to an increasing number of individuals advocating for the creation of strategic Bitcoin reserves within the United States.
In response to a growing interest among federal and state lawmakers following Donald Trump’s November 6th victory, the Alabama State Auditor proposed establishing a reserve of Bitcoin (BTC). In a conversation with 1819 News, he expressed his support for Bitcoin, stating that the argument over whether cryptocurrency would thrive is now resolved.
Sorrell asserted that establishing a strategic BTC reserve would help Alabama, and other U.S. states, diversify government portfolios, hedge against fiat-related risks and inflation, and position jurisdictions as crypto-friendly business areas.
The Alabama Auditor General recommends proceeding with caution, suggesting that the state consider a bill introduced by Wyoming Senator Cynthia Lummis and implement a plan called dollar-cost averaging. This method involves purchasing a set amount of an asset at regular intervals over a specific time frame. Mr. Sorrell proposes that Alabama build its reserve over a two-year period using this approach.
The approach the state should take would be to spread our investments evenly (dollar-cost-averaging) over a 2-year timeframe instead. Given Bitcoin’s recent surge past $100,000, investing at this moment in a bull market might not be the most advantageous timing. A more effective strategy could be making monthly investments for a period of 2 years, thereby smoothing out our purchase price.
Andrew Sorrell, Alabama State Auditor General
Sorrell’s proposition aligns with the rising need for a Bitcoin reserve supported by the government, a concept that has gained momentum due to assurances made by President-elect Donald Trump and his upcoming administration.
Trump consults influential figures in the industry such as Brian Armstrong, CEO of Coinbase, seeks David Sacks – a seasoned Silicon Valley figure – as the first Cryptocurrency Advisor, and proposes pro-cryptocurrency veteran Paul Atkins for the position of Chair of the Securities and Exchange Commission.
Senator Lummis proposed a bill to enhance Trump’s commitment to hold approximately 1% of all existing Bitcoins, which is around 207,000 coins. If passed by the Senate, the Bitcoin bill would collect 4% of the total 21 million Bitcoins over a period of five years.
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2024-12-11 21:56