'The Case for Bitcoin as a Reserve Asset' — Bitcoin Policy Institute
According to the paper, central banks collectively hold $2.2 trillion in gold as of Q1 2024 and continue to expand their gold allocations.
A recent paper from the Bitcoin Policy Institute titled The Case for Bitcoin as a Reserve Asset argued that central banks should adopt Bitcoin (BTC) as a reserve asset to hedge against rising inflation, geopolitical risks, capital control risks, sovereign default, bank failures, and international sanctions imposed by the United States government.
Economist Matthew Ferranti, the paper’s author, made the case that Bitcoin is an “Effective portfolio diversifier” due to a weak correlation between the decentralized asset and other financial instruments.
The economist also highlighted Bitcoin’s lack of counter-party risk as an effective hedge against sovereign defaults — including the risk of financial sanctions — which Ferranti labeled as a form of “Selective default” impacting nations like Venezuela and Russia.
