François Villeroy de Galhau, the Governor of the Bank of France, has changed his stance on Bitcoin, potentially affecting the global financial system.
Changing Stance on Bitcoin
François Villeroy de Galhau, who previously stated that Bitcoin is not a store of value, now believes that everyone is free to invest their savings in this asset. He acknowledged that it is a risky asset, but emphasized that it is a part of personal freedom. The governor also reminded that there is an arbitrage between returns and risks, as confirmed by the Sharpe ratio, which for Bitcoin is above 1, outperforming the U.S. stock market and gold.
The Trump Effect
The shift in the Governor of the Bank of France's position is influenced by Donald Trump's election as U.S. President. During his campaign, he promised to create a strategic reserve of bitcoins. Trump also claimed that it is the current government policy that threatens the dollar, not Bitcoin, signaling a new phase in cryptocurrency regulation.
Why Has Bitcoin Been Shunned?
The distrust towards Bitcoin stems from fears that it might replace central banks. However, over time, this fear has waned, especially in light of statements like Michael Saylor's, who claims that Bitcoin does not need to replace fiat money to succeed. Bitcoin offers even small savers access, prompting financial elites to reconsider their views.
Recognizing Bitcoin as an investment asset marks a new chapter in financial history, pointing to potential shifts in the global economy.
