Bitcoin (BTC) Makes Notable Gains as Countries Consider Incorporating It into National Reserves

Incorporating Bitcoin into national reserves has gained notable traction since Donald Trump's win in the 2024 elections.

Donald Trump’s victory in the 2024 elections has brought renewed attention to the possibility of countries adding Bitcoin to their national reserves. One of the latest developments on this front is a call from Wu Jiezhuang, Chairman of Hong Kong’s Web3 Virtual Asset Development Subcommittee, for the city-state government to consider integrating Bitcoin into its reserves.

This development comes as part of the nation's efforts to keep pace with the United States' leadership in the cryptocurrency space. Countries such as El Salvador and Pennsylvania have already made headlines by adopting Bitcoin as legal tender.

In related news, Christian Lindner, leader of the Free Democrats (FDP) party in Germany, has advocated for the diversification of the country’s reserves to include Bitcoin (BTC). However, it's worth noting that the Japanese government has expressed skepticism towards such proposals.

Hong Kong Embraces Bitcoin

Being recognized as a global financial hub, Hong Kong has been at the forefront of financial innovations. Recent policy changes aim to enhance its status as a fintech center by integrating cryptocurrencies, particularly Bitcoin, into its financial framework.

Wu Jiezhuang has suggested that the Hong Kong Special Administrative Region (SAR) consider adding cryptocurrencies to its fiscal reserves and using foreign exchange funds to acquire and manage digital assets in the long term.

Wu emphasized the global significance of major economies adding Bitcoin to their reserves and recommended that governments and businesses limit their allocation to a small percentage because of Bitcoin’s volatility.

Forming a Bitcoin reserve aligns with Hong Kong’s ambition to lead in the digital economy and to attract cryptocurrency enterprises and investors. The anticipated results include a rise in foreign direct investment and the positioning of Hong Kong as a top hub for digital asset trading and innovation.

Germany’s Plan for a Bitcoin Reserve

Germany's approach to Bitcoin as a strategic reserve is also noteworthy, considering its status as Europe's largest economy. The country has had a history of being open to cryptocurrency, with Bitcoin being recognized as a legal means of payment since 2013.

Recently, Germany has gone a step further by encouraging institutional investments in Bitcoin. Former German Finance Minister Christian Lindner has proposed that the European Central Bank (ECB) and the German Bundesbank consider adding Bitcoin to their reserves.

This follows a similar suggestion from a European Member of Parliament last week. Lindner stated that incorporating Bitcoin would signal Germany’s commitment to the future of finance and may inspire other nations to follow suit.

As we reported earlier, President-elect Donald Trump already announced intentions to sign an executive order for the creation of a Bitcoin reserve, reigniting discussions about its potential effects on cryptocurrency markets.

This is in line with earlier proposals like the Bitcoin Reserve Act from Wyoming Senator Cynthia Lummis. Some experts champion Bitcoin’s potential role in reshaping global finance. Mathew Sigel of VanEck recently argued that the US could reduce its national debt by up to 36% by 2050 through adopting a Strategic Bitcoin Reserve.

Meanwhile, Russia is also showing growing interest in cryptocurrency and is contemplating a Bitcoin reserve, though concerns about Bitcoin’s price volatility may delay its implementation.

Other states, like Texas and Ohio, are also planning to establish their own Bitcoin reserves, further demonstrating the shift in how governments view cryptocurrencies.