Governments Missed Billions by Ignoring Bitcoin Reserves

Over the past decade, Bitcoin has evolved from a niche experiment to a significant global financial asset. Its value surged from less than $1,000 in early 2017 to over $60,000 by 2024, prompting both investors and institutions to re-evaluate their concepts of value, money, and reserve strategies. Meanwhile, many governments remained on the sidelines, dismissing crypto as a fleeting trend or even banning it outright.

Richard Teng, a prominent figure in the crypto industry, argues that governments missed out on billions of dollars by ignoring Bitcoin and failing to build crypto reserves. He suggests that if countries had embraced crypto and accumulated these assets while they were still relatively inexpensive, they could have created strategic crypto reserves. These reserves could have substantially mitigated or even avoided periodic budget deficits, establishing a more secure long-term fiscal position.

Strategic crypto reserves involve the deliberate accumulation of cryptocurrency assets, such as Bitcoin or Ethereum, by governments as part of their national reserves. Traditionally, countries hold assets like gold and foreign currencies to stabilize their economies and protect against external shocks. However, in a world increasingly shaped by digital innovation, crypto could have served a similar, if not superior, purpose. Unlike fiat reserves that suffer from inflation, cryptocurrencies like Bitcoin are deflationary and decentralized, making them a powerful hedge against global economic volatility. Holding strategic crypto reserves would have given national treasuries access to a high-growth, non-correlated asset that outperformed almost every other investment class over the past decade.

For instance, if a mid-sized country had invested just $1 billion in Bitcoin in 2015 when it was trading below $500, by 2024, that reserve would be worth more than $100 billion. Such gains could have made a meaningful impact on budget allocations, debt repayment, infrastructure, and even emergency funding. For countries facing chronic fiscal gaps, this type of financial strategy could have been revolutionary. Instead of borrowing at high interest rates or cutting public spending, governments with early Bitcoin adoption could have funded development goals through the appreciation of their national crypto holdings. Several nations, especially those with volatile currencies, might have benefited immensely by shifting even a small percentage of their reserves into crypto assets.

El Salvador made a bold move in 2021 by adopting Bitcoin as legal tender and allocating it to its national reserves. Despite criticism, the country’s holdings grew significantly in bull markets and became another source of tourism, foreign investment, and technology innovation. In contrast, major economies like India, Germany, and the UK had the technological capacity and financing to do something similar but failed to think outside the box. Some of these countries even sold the crypto they seized from legal seizures, missing out on potential profits in the billions of dollars as Bitcoin’s value continued to rise.

Despite the missed opportunities of the past, the window for governments to build strategic crypto reserves has not entirely closed. By allocating a modest portion of sovereign wealth or central bank reserves to digital assets, countries can future-proof their economies against inflation, devaluation, and systemic shocks. The narrative around crypto has matured, shifting from mere speculation to smart strategy. With tools for custody, regulation, and taxation evolving rapidly, governments today are better positioned to handle the responsibilities of managing digital reserves. The key lies in long-term vision rather than short-term volatility.

The idea of holding strategic crypto reserves, which might have seemed bold five years ago, now feels like a logical step in hindsight. Bitcoin’s growth story is not just about investor gains; it’s about a missed economic opportunity for governments worldwide. By failing to build national crypto holdings, many countries not only lost out on financial gains but also gave up a seat at the table in shaping the future of global finance. As the digital economy expands, the sooner governments integrate crypto into their reserve strategies, the better positioned they’ll be in an increasingly decentralized world.