Last Updated on February 14, 2025 by Bertrand Clarke
Jeff Booth – entrepreneur, author, and investor – February 14, 2025
In a bold move that has sparked widespread debate, former President Donald Trump recently signed an executive order to establish a United States Sovereign Wealth Fund. This initiative aims to manage federal assets more effectively, but it also raises critical questions about the role of Bitcoin in this new financial strategy. The announcement comes at a precarious time, as the Doomsday Clock—a symbolic measure of humanity’s proximity to global catastrophe—has moved one second closer to midnight, now standing at 89 seconds, the closest it has ever been.
A sovereign wealth fund is essentially a state-owned investment fund that manages a country’s surplus reserves. Countries like Norway, Saudi Arabia, and China have long utilized such funds to stabilize their economies and generate returns on national assets. The U.S., however, is entering uncharted territory with this initiative, particularly given its staggering $36.5 trillion in national debt. The question on everyone’s mind is whether Bitcoin, the decentralized digital currency, could play a pivotal role in this new financial framework.
Jeff Booth, a visionary leader, author of The Price of Tomorrow, and founding partner at Ego Death Capital, offers a unique perspective on this development. According to Booth, the establishment of a sovereign wealth fund could be a game-changer, but not necessarily for the reasons one might expect. “Everyone in the world is trying to increase their returns and protect against economic instability,” Booth explains. “A sovereign wealth fund makes sense as a way to place capital in assets that can potentially yield higher returns.”
The conversation naturally turns to Bitcoin, which has been gaining traction as a potential reserve asset. Cryptocurrency advocate David Sacks recently floated the idea on CNBC, suggesting that Bitcoin could become a strategic reserve for nations. Booth elaborates on this notion, emphasizing Bitcoin’s unique properties. “Bitcoin is a decentralized, secure protocol bounded by energy,” he says. “If you measure Bitcoin from the perspective of a system that’s debasing, it becomes clear that Bitcoin prices the free market. All prices relative to Bitcoin would fall forever, assuming Bitcoin remains decentralized and secure.”
This deflationary characteristic of Bitcoin stands in stark contrast to the inflationary nature of traditional fiat currencies. Booth argues that in a credit-based system, inflation is inevitable because the system must continuously print money to sustain itself. “We’ve never lived in a global free market that allows productivity to flow to individuals,” he notes. “In a credit-based system, wealth becomes increasingly concentrated, and the system must keep printing money to maintain solvency. This is why people perceive the world as getting worse—because they’re measuring it against a manipulated currency.”
Booth’s insights shed light on the potential benefits of incorporating Bitcoin into a sovereign wealth fund. With an internal rate of return (IRR) of 45% annually, Bitcoin outperforms traditional assets by a significant margin. Even if purchased at the peak of a market cycle and held for four years, Bitcoin’s lowest IRR is still an impressive 23%. In contrast, traditional investments yielding 11% are effectively losing value relative to Bitcoin. “If you hold Bitcoin in self-custody, it’s a completely risk-free asset with no counterparty risk,” Booth asserts. “It’s an energy-backed system that imposes a new discipline on the world.”
The implications of this are profound. As more individuals and institutions recognize Bitcoin’s value, they may begin to shift their assets into the cryptocurrency, further solidifying its role as a global reserve asset. Booth believes that some countries are already front-running this trend by quietly acquiring Bitcoin and even mining it. “You don’t have to be a government to do this,” he points out. “Anyone can move their assets into Bitcoin and benefit from its non-correlated, risk-free returns.”
The idea of a Bitcoin strategic reserve is not just theoretical. Booth has been advocating for such a move at the municipal level, particularly in Vancouver, Canada. He argues that cities, like nations, are struggling to provide services due to the debasement of currency. “Citizens pay taxes in a currency that’s losing value,” he explains. “By the time the city spends those taxes on services, the cost of providing those services has increased. If a city were to allocate some of its reserves to Bitcoin, it could preserve its purchasing power and better serve its citizens.”
Implementing such a strategy, however, is not without challenges. It requires a fundamental shift in how we understand and measure value. “Most people measure their world from the perspective of a debasing currency,” Booth acknowledges. “But once you understand that Bitcoin cannot be debased, it becomes clear that it offers a way to preserve and even increase wealth over time.”
As the U.S. moves forward with its sovereign wealth fund, the question of whether Bitcoin will play a role remains open. What is certain, however, is that the global financial landscape is evolving, and Bitcoin is poised to be at the forefront of this transformation. Whether governments embrace it or not, the decentralized currency is reshaping the way we think about money, value, and economic stability. In a world teetering on the edge of uncertainty, Bitcoin may well be the escape hatch we need.
