blockchainreporter
  • News
    • Altcoins
    • Bitcoin
    • Blockchain
    • Ethereum
    • Adoption
    • NFT
    • DeFi
    • Metaverse
  • Education
  • Glossary
  • Advertise
No Result
View All Result
Bet Now
blockchainreporter
  • News
    • Altcoins
    • Bitcoin
    • Blockchain
    • Ethereum
    • Adoption
    • NFT
    • DeFi
    • Metaverse
  • Education
  • Glossary
  • Advertise
No Result
View All Result
blockchainreporter
Bet Now
No Result
View All Result
Bitcoin
BTC
1d:
7d:
Ethereum
ETH
1d:
7d:
Polkadot
DOT
1d:
7d:
Solana
SOL
1d:
7d:
Ripple
XRP
1d:
7d:
Shiba INU
SHIB
1d:
7d:

Almost 7% of Bitcoin in Circulation is Held by Governments and Public Institutions Worldwide

Josh Fernandez by Josh Fernandez
November 16, 2022 - 2:39 pm
in adoption news, bitcoin news
0
Bitcoin for Dummies
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

There are lots of reasons why individuals buy crypto, but governments and other institutions have their own reasons. In fact, almost 7% of all Bitcoin in circulation is held by governments and public institutions worldwide, and this number is only likely to grow as the use of crypto becomes more common. But what’s driving these huge investments?

Why do these institutions buy Bitcoin?

Governments tend to buy Bitcoin for a number of reasons, including hedging against macroeconomic trends like inflation, earning interest on their holdings, using Bitcoin for tax payments or payment transactions, and as a store of value.

To hedge against macroeconomic trends.

Most countries now face the threat of deflation, or a decline in the general price level of goods and services. With Bitcoin being seen as an alternative to traditional fiat currencies, many governments are hedging against this risk by buying up large amounts of crypto.

For example, they may purchase Bitcoin as a way to hedge against inflation in their own currency, helping to protect their purchasing power and maintain the stability of their economy.

Cryptocurrencies tend to fall when currencies like the dollar get stronger. This is due to the fact that investors typically move out of crypto and into more stable currencies when there is economic uncertainty.

To earn interest on their holdings.

Interest rates in many countries are very low right now, making it difficult for institutions to get a decent return on their investments. By buying Bitcoin, they can potentially earn much higher returns than they could with traditional fiat. While most governments won’t stake crypto on an exchange, buying and holding on to the right coins can earn them significant revenue.

Rather than keeping large amounts of cash or other traditional financial instruments in reserve, many governments and organizations are turning to crypto as a more secure and lucrative option for managing their money.

Taxation and Payments

Taxation is another major factor driving government investment in Bitcoin. By holding some of their funds in crypto, governments can easily track transactions and ensure that taxes are paid appropriately on any gains made from trading or investing in digital assets. This has become important as countries move towards taxation and regulation of crypto markets.

At the same time, many governments also use Bitcoin to make large payments or international transfers, as it is faster and more secure than traditional methods like a wire transfer. For example, El Salvador has adopted Bitcoin as a legal tender, recognizing it as a store of value and facilitating payments

How do these institutions get Bitcoin?

Tax Payments

The majority of government funding comes from taxes, so it is natural that many governments buy Bitcoin as a way to pay their tax obligations. Many countries now accept Bitcoin payments for everything from income and capital gains taxes to corporate profits and value-added tax.

Bitcoin Seized from criminals

In addition to buying crypto through regular means, some governments also obtain Bitcoin by seizing it from criminals or traffickers. For example, law enforcement officials in the US have seized millions of dollars worth of crypto assets and can decide to sell them off at an auction, or simply keep these locked up.

Direct Purchase

Finally, some governments and organizations may simply choose to purchase Bitcoin directly from exchanges or other sellers. This can be a quick and easy way to obtain large amounts of crypto, though it is also the most expensive option. Regardless of how they get it, though, many institutions are now seeing great benefits in having a diverse cryptocurrency portfolio that includes Bitcoin and other top coins like Ethereum and Ripple.

However, retail traders usually have to purchase crypto via exchanges like Binance, brokers like eToro, or by trading with Bitcoin robots like Bitcode AI. These methods are typically more expensive and take longer but they are often the only way ordinary investors can access the crypto markets. As more governments and other institutions buy Bitcoin, we can expect to see continued growth in the use of these trading methods as well.

These institutions are realizing the many benefits

Cryptocurrencies have had it rough in 2022 but that is starting to change as governments and institutions around the world continue to buy Bitcoin for a variety of reasons. Whether it’s for hedging, earning interest, taxation and payments, or simply as a store of value, these institutions are realizing the many benefits that crypto has to offer.

Tags: AdoptionBitcoinBTCCryptoCryptocurrency
ShareTweet
Josh Fernandez

Josh Fernandez

20-something Non-giver of ETH.

Recommended For You

Justin Sun Says His KPI for Current Year Is to Make TRX Adopted by 5 Countries as Their Legal Tender

by Umair Younas
January 29, 2023 - 10:41 am
0
Tron TRX

Justin Sun labelled this objective as ambitious. Nonetheless, he noted that dedication and hard work can play a significant role in achieving his goal.

Read more

Top Crypto News This Week, Bitcoin and Ethereum in the Spotlight

by Umair Younas
January 29, 2023 - 5:10 am
0
Crypto Trading

This week, 23 Jan - 28 Jan, we saw hustle and bustle in the crypto market especially from Bitcoin, Ethereum and Celsius' narrative.

Read more

Prosecutors Request Judge to Strengthen Bail Conditions for Sam Bankman-Fried

by Umair Younas
January 28, 2023 - 5:55 am
0
SBF FTX

U.S. prosecutors petitioned a Manhattan magistrate for stricter bail restrictions for Sam Bankman-Fried citing that he influence witness testimony.

Read more

Argo Lawsuit Development: Johnson Fistel Requests Information from Shareholders

by Kester Odero
January 27, 2023 - 9:15 am
0
Argo Blockchain

As per Johnson Fistel, LLP, Argo Blockchain plc investors filed a class action case targeting investors who have been linked with fraudulent acts.

Read more

Hut 8 Issues Update on Its Litigation against Validus over North Bay-based Mining Facility

by Umair Younas
January 27, 2023 - 8:00 am
0
hut 8

Hut 8 pursues compensation for all the damages caused because of Validus’ violation of the Power Purchase Agreement (PPA).

Read more
Next Post
Binance NFT

Binance Introduces an Enhanced NFT Experience for Users on Binance NFT Marketplace

PARTNERS LIST

PRESS RELEASE

China’s “Instagram” chooses Conflux Network for permissionless blockchain integration

by chainwire
January 25, 2023 - 8:42 am
0

Toronto, Canada, 24th January, 2023, ChainwireLittle Red Book, (XiaohongShu), the Chinese version of Instagram integrates Conflux Network as permissionless blockchain...

snowfall protocol

Snowfall Protocol (SNW) Takes the Spotlight as Waves (WAVES) Founder Unveils New ‘Undepeggable’ Stablecoin and Ripple’s (XRP) New Commercial Released

by Max Clark
January 25, 2023 - 7:02 am
0

The cryptocurrency market has seen its fair share of ups and downs, but one project that seems to be gaining...

Snowfall

Binance (BNB) Will Back Terra Classic’s Upgrade, Cardano (ADA) Introduces Custom-built Sidechains, Snowfall Protocol (SNW) to Have its Grand Launch Soon

by Wayne Jones
January 24, 2023 - 4:53 am
0

While the former two are in the headlines due to recent changes in their ecosystem, Snowfall Protocol (SNW) is all...

Snowfall Protocol

Terra Classic (LUNC) and Polygon (MATIC) Shows Instability Signs, While Snowfall Protocol (SNW) Presale Raises $4M

by Max Clark
January 23, 2023 - 12:00 pm
0

This article will critically examine why Snowfall Protocol (SNW) is gaining ground and why Polygon and Luna Classic's (LUNC) price...

BlockchainReporter is a trusted name in the cryptocurrency and blockchain technology news space, keeping its readers abreast of the latest and most significant trends in the industry.

Here at BlockchainReporter, our team of global writers is dedicated to providing price analysis on leading cryptocurrencies and covering the latest developments pertaining to bitcoin news, altcoins news, blockchain news, NFT news and cryptocurrency adoption news from around the world.

News

  • Altcoins
  • Bitcoin
  • Blockchain
  • Ethereum
  • Adoption
  • NFT
  • DeFi
  • Metaverse

Info

  • Education
  • Glossary
  • Market
  • Press Release

Company

  • About Us
  • Terms & Conditions
  • Advertise
  • Sitemap
  • Contact

@2022 – Blockchainreporter.net. All Right Reserved.

No Result
View All Result
  • News
    • Altcoins
    • Bitcoin
    • Blockchain
    • Ethereum
    • Adoption
    • NFT
    • DeFi
    • Metaverse
  • Education
  • Glossary
  • Advertise

@2023 - Blockchainreporter.net. All Right Reserved.