Bitcoin’s a Backdoor for U.S. Sanctions; Will Cause a Bull Run
You guys understand how much I believe in blockchain technology and digital currency. I sincerely think they’ll revolutionize the planet on the same scale as, if not more than, the internet did in the ’90s.
Although 2018 was a terrible year for Bitcoin (BTC), it still has plenty of time to turn it around in 2019. And guess who just might be the catalyst for a fully charged BTC bull run in 2019?
That’s right: Vladimir Putin and Russia.
You see, the Kremlin is allegedly planning on investing $10 billion into Bitcoin, aiming to replace Russia’s USD reserves with the digital currency.
This is being done in effort to mitigate the sanctions placed on the country by the United States.
I’ll be honest: I surely didn’t have this in mind when I said Bitcoin was going to have a good year. I certainly didn’t think Putin would be the one to thank for it.
This week, I’ll elaborate on Russia’s plan and why it’ll be great for our digital wallets.
According to Russian economist Vladislav Ginko, Russia is planning on investing at least $10 billion in U.S. dollars into Bitcoin this quarter.
This could happen as early as next month, February 2019.
According to Ginko, this is happening in an effort to alleviate sanctions placed on Russia by the United States.
The Kremlin earned the majority of its U.S. sanctions from Russia’s 2014 invasion of Ukraine. The country has also received sanctions from Washington due to its trading with North Korea, support of Syria, use of chemical weapons, and more.
Oh, and I can’t forget that Russia also interfered with our 2016 presidential election!
It got sanctioned for that, too.
This is what Ginko had to say on why U.S. sanctions have spurred Russia to make this move into BTC.
[The] Russian government is about to make a step to start diversifying financial reserves into Bitcoin since Russia [is] forced by US sanctions to dump US Treasury bonds and [take] back US dollars. These sanctions and the will to adopt modern financial technologies lead Russia to the way of investing its reserves into Bitcoin.
Russia’s been diversifying its financial reserves and undergoing de-dollarization for some time. The country has varied reserves of the renminbi, euro, and yen, in which Russia is consistently boosting its holdings.
Here is Vladimir Putin on de-dollarizing Russia:
We have no goal of moving away from the dollar, it’s the dollar that’s moving away from us.
While $10 billion is planned for this quarter, there’s reportedly $460 billion more to be invested in the future...
Allegedly, Russia was planning on creating a digital currency backed by diamonds, oil, and gold — apparently inspired by Venezuela’s Petro. That plan hasn’t been executed as of yet.
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Russia’s not alone...
Russia’s not the only country with BTC on its mind regarding lessening the blow of U.S. sanctions...
U.S. sanctions on the Middle Eastern country left it economically stranded. The most profound impact from U.S. sanctions came from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.
Due to the U.S. sanctions, SWIFT kicked Iranian banks out of its network. Doing so makes it hard, essentially impossible, for banks to work with ones excluded from the SWIFT network.
The Iranian Central Bank was left isolated and without the ability to process international transactions.
To that end, Iranians are mining Bitcoin to earn digital currency and trade for income. Luckily, BTC mining is legal in Iran.
U.S. sanctions delivered a blow to Iran’s economy, and Bitcoin is helping them attempt recovery.
The first implication I see from all this is that U.S. sanctions are losing their power...
The goal of a sanction is to punish the offender. What’s the use if the punished will just find a loophole to avoid the sanction and continue on as usual?
Aside from Russia doing this to lessen the blow of U.S. sanctions and the political implications it could bring, this could be great news for BTC investors.
If Russia decides to spend $10 billion on BTC, it would cause a sudden jump in price for the crypto.
Imagine if Russian citizens follow suit and invest, too. Russia’s almost twice the size of the U.S...
Other countries could be looking at Russia and Iran right now, noting that BTC and other tokens could be the backdoor to their sanctions. They could end up jumping on that wave as well.
If the Kremlin does decide to go along with this plan, a lot of us could end up having a great a year with our digital wallets swelled.
And we’d have to thank Vladimir Putin for it.
John Butler, Jr.
John Butler is Token Authority’s contributing editor. He first learned of Bitcoin in 2010 when it was still unknown. Since then, he has seen cryptocurrency and blockchain technology swell in popularity across the globe, making innovators and investors plenty rich. Every week, he brings Token Authority readers compelling information for crypto investing.