Various companies are also stocking up on Bitcoin.MicroStrategy increased its Bitcoin holdings to 423,650 BTC with a $2.1 billion investment. Riot Platforms announced a $500 million convertible bond issuance to expand its Bitcoin acquisitions as well. In El Salvador, under IMF pressure, the government is revising its Bitcoin Law to make Bitcoin usage voluntary instead of mandatory.
CZ Predicts China Will Join Global Bitcoin Reserve Race
Former Binance CEO Changpeng “CZ” Zhao shared his thoughts on the potential for China to establish a strategic Bitcoin (BTC) reserve, and suggested that the nation could follow a path similar to a plan proposed by the incoming United States presidential administration. At the Bitcoin MENA conference in Abu Dhabi on Dec. 9, Zhao said smaller nations might take the lead in adopting Bitcoin reserves, though the process will likely unfold gradually. Zhao did acknowledge that China’s policies on cryptocurrency are still a bit unpredictable due to the opaque nature of its government.
According to Zhao, President-elect Donald Trump’s campaign promise to create a “strategic national Bitcoin stockpile” could greatly influence global adoption. Trump’s plan involves the U.S. government purchasing and holding one million Bitcoin, but has drawn criticism for its potential to benefit existing Bitcoin holders by driving up prices.
The activation of this reserve under Trump’s administration could encourage other countries, including China, to follow suit. Despite this possibility, Zhao mentioned that there was no evidence of China hoarding Bitcoin, though he deemed it “inevitable” for the government to establish a reserve of the digital asset, and even called it the only true “hard” asset.
Zhao spent part of his early life in China, and is confident in the country’s ability to act swiftly on policy changes when necessary. He speculated that China might first accumulate Bitcoin and later announce its holdings, rather than declaring its intentions upfront. This is a realistic prediction when considering the government’s historically cautious stance on major financial shifts.
Zhao’s comments were made after his release from U.S. federal prison in September, where he served four months for violating Anti-Money Laundering laws. After his resignation as Binance CEO in November of 2023, Zhao agreed to step away from any operational or managerial roles in the exchange.
MicroStrategy Doubles Down on Bitcoin
MicroStrategy, the largest corporate holder of Bitcoin, recently boosted its Bitcoin holdings again, despite the fact that the crypto reached a new all-time high of over $100,000. Between Dec. 2 and 8, the company bought 21,550 BTC for $2.1 billion at an average price of $98,783 per Bitcoin, bringing its total holdings to 423,650 BTC.
These acquisitions were made at a cumulative investment of $25.6 billion, with an average purchase price of $60,324 per Bitcoin, according to Michael Saylor, the company’s co-founder and former CEO.
Saylor is still steadfast in his bullish outlook on Bitcoin, and is confident that he will continue to buy BTC even at a price of $1 million per coin. On Yahoo Finance’s Market Domination, he stated that he plans to maintain aggressive acquisition strategies. He even envisions daily purchases worth billions of dollars at high valuations.
Saylor also urged the U.S. government to shift its financial strategy by selling its gold reserves and investing in Bitcoin instead. He argued that a move like this would not only hedge against inflation but also weaken adversaries relying on gold-backed assets. Saylor proposed that selling the nation’s gold holdings could fund the purchase of up to 5 million Bitcoins, which could potentially boost the U.S. asset base to a hundred trillion dollars while diminishing the value of gold globally.
These comments were made after Federal Reserve Chair Jerome Powell’s acknowledgment of Bitcoin as a competitor to gold but not as an actual threat to the U.S. dollar.
Riot Platforms Plans $500M Bitcoin Investment
Riot Platforms also announced plans to raise $500 million through a private bond issuance aimed at buying more Bitcoin and supporting general corporate purposes. The proposed offering of senior convertible notes will target qualified institutional investors, with an additional option for purchasers to buy $75 million more in notes within three days of their initial investment.
The notes are set to mature on Jan. 15 of 2030, and will be unsecured senior obligations and may be redeemed or converted into Riot common stock based on terms determined at the time of pricing. The company did not share any details regarding interest payments yet.
This decision from Riot aligns with the broader trend among major Bitcoin miners and data centers taking advantage of convertible bonds to fund their operations. Riot held 10,427 BTC at the end of the third quarter, and produced 1,104 BTC during that period while selling none.
Seven publicly traded Bitcoin miners and data centers have collectively raised $5.2 billion through convertible bond offerings since June, according to The Miner Mag. Among these, Core Scientific raised $350 million in August, increasing the amount to $400 million shortly after. Marathon Digital, or MARA, issued $1 billion in convertible notes in November, which it used to manage debt and buy 6,474 BTC. This brought its total holdings to approximately 34,797 BTC.
El Salvador Revises Bitcoin Policy
El Salvador, the first country to adopt Bitcoin as legal tender, is reportedly revising its Bitcoin ambitions under pressure from the International Monetary Fund (IMF). According to a report by the Financial Times, the country is expected to finalize a $1.3 billion loan agreement with the IMF in exchange for modifications to its Bitcoin Law. The proposed changes will eliminate the legal requirement for businesses to accept Bitcoin as payment, making its use voluntary.
The agreement is anticipated to be finalized in the next two to three weeks, and is expected to unlock an additional $1 billion in lending from both the World Bank and the Inter-American Development Bank over the coming years. This is a big shift in El Salvador’s Bitcoin policy, which has faced consistent opposition from the IMF since its introduction in September of 2021. The IMF frequently raised concerns about the financial stability risks associated with Bitcoin adoption, and urged the Salvadoran government to reconsider its stance.
Since the passage of its Bitcoin Law, El Salvador has been actively buying Bitcoin, including an initiative to buy one Bitcoin daily. By November of 2024, the country accumulated 5,942 BTC. The recent surge in Bitcoin’s price to all-time highs boosted El Salvador’s unrealized gains to over $300 million.
Discussions between the Salvadoran government and the IMF over the loan and potential revisions to the Bitcoin Law have been ongoing since October 2024. While the deal could provide much-needed financial support to the country, it also signals a potential scaling back of its pioneering Bitcoin strategy, which has been a hallmark of President Nayib Bukele’s administration.
This article was originally Posted on Coinpaper.com
