what is a Strategic Bitcoin Reserve?
A strategic bitcoin reserve is a stock of bitcoin that organizations maintain as part of their financial strategy. Strategic bitcoin reserves can vary from place to place, but are generally made for one or more of the following reasons:
Protection against inflation – Bitcoin has a fixed supply, meaning it cannot be printed like fiat currency, so it tends to maintain purchasing power over time.
Diversification – Holding bitcoin adds another type of asset to a financial portfolio, making it a common alternative for diversification.
Store of value – Many consider bitcoin a good store of value due to its scarcity and durability. It is also referred to as “digital gold.”
As more people and institutions recognize the value of bitcoin, some have started to store it as a reserve to strengthen their financial position.
Why Governments and Companies Hold Bitcoin Reserves
1. Protection against inflation
Traditional currencies tend to lose value due to inflation. Bitcoin, however, has a predictable issuance rate and a limited supply (only 21 million coins will ever exist). This scarcity makes it an attractive protection against inflation and a good store of value.
