Bitcoin: From the "Black Box" of Knox to On-Chain Transparency

Recently, a striking proposal has sparked heated discussions in the U.S. political arena—using the profits from gold reserves to purchase Bitcoin in a "budget-neutral" manner to enhance the national Bitcoin reserves. This suggestion coincides with the International Monetary Fund (IMF) officially incorporating Bitcoin into the global economic statistical system. As Bitcoin is included in the "Balance of Payments and International Investment Position Manual," central banks and statistical agencies in various countries are required to record Bitcoin transactions and holdings in relevant reports. This not only represents a formal acknowledgment of Bitcoin's influence in the international financial system, but also signifies its evolution from a speculative asset to a more institutionalized financial instrument.

However, the most thought-provoking aspect of this proposal is that the United States is considering using gold—traditionally seen as the "ultimate safe-haven asset"—to exchange for Bitcoin. This raises a fundamental question: Is gold still the undisputed safe-haven asset? If so, why have no companies over the millennia adopted aggressive strategies similar to those seen in the Bitcoin market to accumulate gold long-term? As global policymakers reassess the positioning of this emerging asset within the financial system, the United States seems to have indicated its stance. Can Bitcoin become the pioneer of a financial paradigm shift?

The Gold Reserve Strategy of the United States

The United States has the largest official gold reserves in the world, totaling 8,133.5 tons, a status that has been maintained for 70 years. However, this gold has long been stored in specific locations, such as the Fort Knox Gold Reserve in Kentucky, Denver, and the New York Federal Reserve, and is not circulated in the market. Since the "Nixon Shock" ended the Bretton Woods system in 1971, the U.S. gold reserves are no longer used to support the dollar but are held as a strategic reserve asset, typically not sold directly.

Therefore, if the United States wants to use the "surplus of gold reserves" to purchase Bitcoin, the most likely way is to utilize gold-related financial instruments rather than selling physical gold. Historically, the U.S. Treasury has created dollar liquidity by adjusting the book value of gold, without increasing actual gold reserves. This method is essentially a form of "revaluation" of assets and can also be seen as an alternative to debt monetization.

Currently, the U.S. Treasury has fixed the book value of gold on its balance sheet at $42.22 per ounce, which is far below the current market price. If Congress approves an increase in the book price of gold, the book value of the Treasury's gold reserves will increase significantly. Based on the new price, the Treasury could apply to the Federal Reserve for more gold certificates in exchange for the corresponding new dollars.

This means that the United States can implement a "invisible dollar devaluation" by adjusting the book value of gold, while generating massive fiscal revenue. These newly added dollar funds can be used to purchase Bitcoin, increasing the United States' Bitcoin reserves. The gold revaluation not only provides financial support for Bitcoin purchases, but may also drive an increase in Bitcoin demand in a broader financial context.

However, while this approach may superficially encourage other institutions and investors to follow suit and attract more liquidity into the Bitcoin market, it may also pose risks. If the market perceives a decline in the confidence of the US dollar as a long-term trend, the global asset pricing system may change, and the price discovery mechanism for Bitcoin may become more uncertain.

The History and Current Status of the Gold Market

The gold market has never truly been free. Historically, gold has not only served as a safe-haven asset but also played the role of a "shadow leverage" in monetary systems. There are countless examples of geopolitical games using gold, such as the "golden gate incident" in the 1970s. At that time, the international credibility of the dollar was impacted by the Vietnam War and other factors, and the United States maintained confidence in the dollar by raising the relative price of gold. Moreover, in the 1980s, the Reagan administration indirectly intervened in market prices through "gold swaps"; in the 2000s, the Federal Reserve used the gold leasing market to release liquidity to maintain the strong position of the dollar.

It is worth noting that the 81.35 tons of gold reserve data has not been independently audited for decades. The integrity of the gold in the Knox vault has been a hotly debated "black box" issue in the market. More importantly, although the U.S. government does not directly sell gold, it may manipulate its value through financial derivatives, achieving shadow monetary policy operations.

Bitcoin: A New Financial Tool?

As interest in Bitcoin rises in the United States, the market may enter the "Bitcoin becoming a shadow asset" phase—where the authorities acknowledge the value of Bitcoin but limit its direct impact on the existing system through policies and financial tools.

If the U.S. government includes Bitcoin as a strategic asset and begins to accumulate it, although it cannot directly control the supply or price of Bitcoin, it can conduct market operations through shadow institutions (such as Bitcoin ETFs or trusts) to indirectly influence its price and market sentiment. These institutions can utilize the liquidity and volatility of the Bitcoin market to put a large amount of Bitcoin into a "hoarding" state, releasing it at specific times to affect market supply and demand and price trends. This operation is similar to the "gold swap" and "gold leasing" in the gold market, primarily achieved through financial instruments and market strategies.

However, the technical characteristics of Bitcoin may prevent it from repeating the mistakes of gold:

1. Transparency: Bitcoin transactions are traceable on-chain, and all transactions are publicly auditable. Anyone can track the circulation of Bitcoin through on-chain data tools. The Bitcoin network is composed of decentralized independent nodes, each holding a complete transaction ledger, making it impossible for a single entity or country to alter or manipulate transaction data.

2. Risk Resilience: The centralized management model of traditional financial systems brings systemic risks, as evidenced by the 2008 financial crisis and the 2023 Silicon Valley Bank incident. In contrast, the Bitcoin system is more resilient. Even Bitcoin stored in centralized exchanges can be verified for actual storage conditions through technical means, such as the Proof of Reserves (PoR) program. Excess PoR ensures that the assets held by institutions not only cover user deposits but also have additional reserves, providing a safety buffer.

The strategy of the United States considering creating a "new" dollar through gold revaluation and purchasing Bitcoin is not only a form of shadow currency operation but also exposes the fragility of the global financial system. Whether Bitcoin can truly become an independent and free "digital gold" rather than merely an appendage of the American financial system remains to be seen. However, from a technological perspective, both on-chain real-time queryable transactions and the PoR of centralized institutions provide innovative solutions for the traditional financial system. This proposal has opened up a profound dialogue about the future financial system.