Bitcoin Adoption: From Retail to Institutions, Signs That Sovereigns Are Gearing Up

Bitcoin Adoption: From Retail to Institutions, Signs That Sovereigns Are Gearing Up

3 min read

The shift in Bitcoin adoption from retail to institutional spheres is happening before our eyes. In the second installment of this two-part interview series, Michelle Makori, Kitco News’ Lead Anchor and Editor-in-Chief, engages in a revealing discussion with Fred Thiel, Chairman and CEO of Marathon Digital Holdings. Thiel asserts that the adoption of Bitcoin is transitioning from retail to institutions, with sovereign entities poised to follow suit. The interview delves into the worldwide trend of embracing Bitcoin as a reserve asset, and Thiel shares insights on the role of Bitcoin mining in this evolving landscape.

To explore their dialogue further read on, or watch the complete video here:

Challenge to Bitcoin Decentralized Ethos

Michelle: Do you see the institutional interest, particularly from BlackRock potentially jeopardising Bitcoin’s decentralized ethos and being problematic for the broad Bitcoin mission?

Fred: No, think about it this way; there are likely between 4 and 5 million Bitcoin in liquid circulation today. The rest of it is held off chain, or not off chain but it’s in cold storage and hasn’t moved in multiple years. Arguably 4 or 5 million Bitcoin could be lost forever because back in the early days people didn’t care if they’d forgotten their keys or lost access to their wallets. It would be very hard for BlackRock to accumulate a position of owning 20% of Bitcoin and would drive Bitcoin prices to such heights that the question is what the benefit for them in having that would be.


Bitcoin Risk to Fiat Currency

Michelle: Do you share the sentiment that the fundamentals of what Bitcoin is could be altered?

Fred: Bitcoin, arguably today, is just a financial instrument, a store of value. The amount of Bitcoin used for transacting is fairly low. In El Salvador, Venezuela and countries with ultra-high inflation where there isn’t really an alternative, people are even using Tether and stablecoins because there’s so much volatility in Bitcoin… I believe that the regulators have the view on Bitcoin that they do because they don’t view it as a risk to the fiat currency of the US – they view it as an asset a store of value.


Sovereign Interest

Michelle: I want to touch on this point where you said you see sovereign interest. Explain what you mean by this?

Fred: Assume you’re a commodity producing country, generating revenues in foreign currency coming into your country. You need to hold those profits somewhere. For many years the US dollar has been the primary reserve currency. If they want to have more diversification or if the US currency was to start losing its attractiveness you need to find alternatives. You can only hold so much gold before it becomes too concentrated and you have too much of it in your portfolio. You need to look for alternative assets and Bitcoin on a risk adjusted basis has been proven to be a very good asset.


Transition in Bitcoin Adoption

Michelle: Is the Bitcoin adoption path moving from retail to institutions?

Fred: Absolutely, I think you’re seeing a large number of partnerships with energy companies. Energy companies and Bitcoin miners are starting to partner. We’re mining Bitcoin with landfill gas off of trash heaps, capturing that methane and turning it into Bitcoin, for example. You’re going to see agricultural bio waste, and all sorts of waste being turned into Bitcoin. More and more countries and industries are going to get involved in this and I think Bitcoin is going to be one of these commodities that is produced through converting waste energy into heat. Bitcoin will be a by-product that will generate profits for people all over the world.

Watch the video now for the full-length discussion and hear Fred’s views on how sovereigns are gearing up.


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