Coinbase’s Brian Armstrong Calls For 11% Bitcoin Reserve

Coinbase Chief Executive Officer Brian Armstrong jumped solidly into the strategic bitcoin reserve argument on Jan. 24, arguing that any country with gold reserves should also have a bitcoin reserve of at least 11%.

He arrived at that number by looking at the market capitalization of gold, which is approximately $18 trillion, and that of bitcoin, which is about $2 trillion, or 11%

Comparing the two, Armstrong argued in a Jan. 24 X post that bitcoin “is a better form of money,” saying that it is more divisible, portable and even fungible than gold.

Divisible is a fairly easy argument to make, given that each bitcoin is divisible in 100 million satoshis, whereas gold generally cuts off at one gram. As for portable, any amount of bitcoin can fit in a thumb size hardware wallet, while one bitcoin worth of gold weighs almost 1.2 kilograms.

Even More Fungible

As for fungibility, Armstrong makes the case that bitcoin is more fungible as gold can be alloyed with other metals, and “it’s relatively hard to tell if gold is pure.”

He puts decentralization and scarcity of bitcoin on par with gold

“All this leads me to believe that any country with Gold reserves, should be holding at least 11% of that amount in Bitcoin reserves,” Armstrong said. “And I believe in the next five to 10 years Bitcoin's market cap will likely surpass Gold. So these reserves should grow to exceed Gold.”

Armstrong added that if the U.S. creates a strategic bitcoin reserve he believes the G20 will follow.

Stockpile v. Reserve

The Trump Administration’s crypto executive order was careful to talk about having a national “stockpile” of digital assets rather than a strategic bitcoin reserve.

It discussed evaluating “the potential creation and maintenance of a national digital asset stockpile” created from cryptocurrencies seized by the government in various law enforcement actions, rather than building a reserve by buying bitcoin.