Dan Morehead, CEO of Pantera Capital, said that in light of the sanctions placed on Russia, nation states and citizens around the world alike will likely find it very attractive to keep control of their own money, and countries may start to switch to Bitcoin for foreign reserves.
"Countries may soon begin to switch to bitcoin for foreign/cloud reserves. The ability to hold their own currency reserves will become very attractive to many nations and citizens."
Morehead added that bitcoin is attractive to many citizens because they want to protect themselves from the decisions of their governments or dictators.
Morehead said the latest Western sanctions against Russia have proven that foreign reserves held in currency controlled by other countries are not as secure as previously assumed. It should be noted that this awareness came after the Central Bank of Russia was deprived of a large part of its foreign reserves of 630 billion dollars, which it held before the war.
This led to a collapse in the value of the Russian ruble, and in response the central bank raised interest rates to 20%, which Morehead said would "harm the real estate market". In addition, Russia's stock market is still closed, while the stock prices of large Russian companies traded abroad collapsed.
"Every day, Russian citizens suffer a great financial devastation as a result of the decisions of their leaders," Morehead said.
Morehead made these comments after the United States and other countries said they would "freeze" Russian central bank assets in their countries to cut financing for the war in Ukraine.
Additionally, on Tuesday there were reports that a bipartisan group of senators in the United States will introduce a bill aimed at preventing Russia from selling the gold it holds as part of its reserves.
Axios stated that with this bill, "secondary sanctions" will be applied to American institutions that trade with Russian central bank assets or carry gold, as well as organizations that sell physical or electronic gold in Russia. The report also said the goal is to include the law in a broad spending bill expected to be approved on Friday.
Russia has the fifth largest central bank gold reserves in the world, after the United States, Germany, Italy and France. According to the World Gold Council, Russia's central bank has a total of 2,301 tons of gold.