US Senator: Selling gold and buying Bitcoin will have a very neutral impact on the US balance sheet

Republican Senator Cynthia Lummis of Wyoming previously proposed a plan to sell some of the Fed's gold in order to build the strategic reserve of Bitcoin proposed by the president-elect without increasing the government deficit. Analysts believe that in theory, the Fed has enough gold to buy 1 million Bitcoins, and there will be a lot of surplus. The Fed's balance sheet lists certificates representing gold held by the Treasury Department, which are worth about $11 billion. However, this value is based on the so-called legal price, which has remained at $42.2222 per ounce since 1973. At current spot prices, this batch of gold is worth about $675 billion, but the liquidation of a large amount of government gold carries the risk of lowering market prices. At current market prices, it would cost about $90 billion to buy this amount of Bitcoin, but if Cynthia Lummis's proposal is passed, investors may rush to buy before the US government, and the purchase amount may increase. Cynthia Lummis explained: “We already have financial assets in the form of gold certificates, which can be converted into Bitcoin. Therefore, the impact on the US balance sheet is very neutral.” (Bloomberg)