Bitcoin can provide the long-term savings the province desperately needs
When it comes to saving money, cash is not king.
The point of money is to take the value you’ve created with your time and labour, and store it to use at another time and place. But Canadian Dollars — and all fiat currencies for that matter — do a bad job of transferring value over time. Why? Because governments can — and regularly do — print more dollars, ultimately devaluing their worth.
Replacing cash positions with bitcoin — the world’s leading digital currency — is a much better way to generate returns. It’s scarce, has a finite supply — an eventual 21 million bitcoins, to be exact — and has incredible upside, even still.
Many visionary companies are making the switch. To prevent the value of their cash reserves from dwindling, they’re adding significant sums of bitcoin to their balance sheets. Why aren’t governments taking the same action?
If the province of Alberta had invested 5% of its tax revenue into bitcoin as a saving mechanism 10 years ago, we would be the richest jurisdiction in the world today. Instead, our Alberta Heritage Savings Trust Fund has dwindled, hitting its lowest value in eight years during 2020.
We deserve a better savings plan. Not only do the majority of Albertans value the idea of spending less than we earn, but strong savings will be crucial to our long-term sovereignty.
Thankfully, it’s not too late for the Alberta government to invest in bitcoin. In fact, I would argue it’s the perfect time.
Bitcoin is still in the early stages of monetization and will only continue its rise as the superior global currency. And as soon as a single nation, state or province adds bitcoin to its reserves, others will inevitably follow — and fast. The government that acts now will experience a tremendous rise in the long-term value of their reserves and secure the financial wellbeing of its citizens for decades to come.
Sadly, nearly all jurisdictions — Alberta included — are dragging their feet. If only they’d take a cue from some of the world’s leading companies who are at the forefront in thinking about how to manage their cash reserves.
In February 2021, Tesla announced it had bought USD$1.5 billion worth of bitcoin for “more flexibility to further diversify and maximize returns on our cash.” Elon Musk even tweeted, “When fiat currency has negative real interest, only a fool wouldn’t look elsewhere.”
With its significant position, Tesla joins a growing number of companies investing heavily in bitcoin, among them Galaxy Digital Holdings, Square, Inc. and the biggest buyer to date: MicroStrategy.
Last August, MicroStrategy made its first foray into bitcoin investing when it bought USD$250 million worth. The company has continued to beef up its balance sheet with bitcoin, with current holdings worth more than USD$4 billion.
Bitcoin is such a huge part of the company’s success that it’s become one of its two core strategies.
“The company remains focused on our two corporate strategies of growing our enterprise analytics software business and acquiring and holding bitcoin,” said Michael Saylor, MicroStrategy’s CEO, in a recent press release. “The company now holds over 90,000 bitcoins, reaffirming our belief that bitcoin, as the world’s most widely-adopted cryptocurrency, can serve as a dependable store of value.”
I couldn’t agree more.
Investing in bitcoin right now to protect and enhance the financial wellbeing of all Albertans is a no-brainer. The province could start by putting as much bitcoin as it can afford into its reserves, laying the foundation for a reliable and lucrative long-term savings plan, and build upon its position.
Eventually, and in my ideal scenario, Alberta would become independent from Ottawa and use bitcoin as its currency. The first jurisdiction that transitions to a bitcoin standard will likely become the richest nation in the world — and we could be that nation.
A far more likely scenario is that a country already losing control of its currency, such as Argentina or Venezuela, will declare bitcoin as its currency before any western nations do. The announcement will trigger a race to the exits and a rise in bitcoin’s value, as more countries make the transition.
Independence from Canada, however, is more complicated than the short-term option to invest now. Alberta’s government leaders have a real and immediate opportunity to bolster the province’s balance sheet with bitcoin.
The question is: will they take it?
Guest Column by Dave Bradley, Chief Revenue Officer of Bitcoin Well
@BitcoinBrains on Twitter