The widespread adoption of bitcoin by governments is one of the events that has led to a significant increase in the price of this digital currency, and now it seems that the opportunity has arisen. According to experts, Russian financial sanctions may soon encourage other countries to change their foreign exchange reserves and use digital currencies.
According to CryptoGlobe, Bill Miller, billionaire investor, founder and CEO of Miller Value Partners, said the current collapse of the Russian ruble “will lead to an upward trend in bitcoin” as the value of this digital currency is determined by global supply and demand. This could also lead to the use of bitcoin as a reserve asset in other countries.
Miller serves as portfolio manager for Opportunity Equity and Income Strategy. In an interview with CNBC, he said that currently 16% of Russia’s total $ 640 billion foreign exchange reserves are in US dollars and 32% in euros. This means that almost half of the country’s reserves are controlled by those who intend to hit the Russian economy.
Last week, Russian President Vladimir Putin announced the start of a “special military operation” on Ukrainian soil, which later proved to be a full-scale offensive against the country. The move provoked a backlash from Western leaders, including economic sanctions.
Sanctions pushed the Russian ruble to a record low of more than 30 percent against the US dollar, while the Moscow Stock Exchange (MOEX) index fell as much as 40 percent before the end of the week. Shares of Sberbank, the Russian banking and credit giant, also fell 95 percent on the London Stock Exchange amid an unusual outflow of liquidity in its market.
Miller said Russia was clearly not in a good position, as only 22 percent of its gold reserves, which are in the form of gold, are not controlled by the latter. The experienced investor explained that about 100 countries do not use common reserve currencies (such as the dollar, the euro and the Japanese yen) as the official currency. Now these countries may seek to keep assets that other countries cannot use against them and not be affected by inflation.
So I think these flows will be a very upward trend for bitcoin.
Miller added that bitcoin is different from other digital currencies; Because other digital currencies are designed to solve other problems. As a result, opening an account with them is an adventurous and risky investment.
Miller has long believed that the bitcoin trend will be a scourge. In October 2021, he supported bitcoins, but was not very optimistic about the survival of the coins. He believes that people who use bitcoin can insure their capital against financial disasters.
The publication How do governments store bitcoins? The answers of famous billionaires first appeared in Digital Currency.