A Russian economist claims that U.S. sanctions could result in the triggering of the next Bitcoin bull market.
Vladislav Ginko, a well known Russian economist and lecturer at the Russian Presidential Academy of National Economy and Public Administration (RANEPA) made the claim on Twitter and in an interview with an Australian publication.
Ginko had this to say in response to a tweet by Chris Burniske of Placeholder Venture Capital – a VC fund that makes early stage investments in the institutional financial services industry in the United States:
“Chris, I believe sitting here in Moscow, Russia, that the real factor of Bitcoin ]adoption] will be when the Russian government I’m working for will start investing almost $470 billion reserves into Bitcoins. I expect that will be at least $10 billion in the first quarter of this year.”
In the discussion that followed, some questioned the figure of $470 billion cash reserves. However, Ginko claims that official data from the Bank of International Settlement (BIS) based in Basel, Switzerland, verifies this figure. He also clarified that such an amount is not going to find its way into Bitcoin overnight. However, his expectation is that $10 billion will be converted to Bitcoin before the end of February.
In consideration of his claims, others suggested that $10 billion would send the Bitcoin price rocketing unless the purchases were made via over the counter (OTC) trading but then, liquidity would still be a major issue.
Ginko stated:
“Huge reserves must be invested in something right now and the one reasonable option is Bitcoin since it’s resistant to U.S. sanctions of the Office of Foreign Asset Control (OFAC).”
When someone tweeted that if your money/bank can be sanctioned, it’s not your money, Ginko agreed suggesting that it has become increasingly difficult for Russian businesses to open bank accounts abroad due to the sanctions.
Others speculated that this could form part of a de-dolarization strategy that Russia may be pursuing. Back in October, Russian president Vladimir Putin stated that the U.S. is undermining confidence in the dollar as a universal reserve currency due to the imposition of sanctions. He added that these actions were borne out of complacency and a misconception on the part of the U.S. administration that there won’t be any negative consequences.
Rather than adopting a strategy of de-dolarization, Putin has stated that it’s more of a case of Russia being backed into a corner on the matter. Speaking at a conference at the end of November, Putin said:
“It’s not us who set the goal to go away from the dollar. It’s the dollar that goes away from us.”
He added that in trying to use the dollar as a political weapon, the U.S. has not just shot itself in the foot, “but a bit higher”.
Ginko said that U.S. sanctions can only be mitigated through the use of Bitcoin. “[The] Central Bank of Russia sits on $466 billion of reserves and has to diversify in case there is limited opportunities to do it [in the future]”, he claimed.
