Bulgaria, a small country located in Southeast Europe, nestled between Romania and Greece, is set to become one of the wealthiest countries in the world.
The reason for this is its possession of 213,000 bitcoin, which its authorities seized from a group they labeled as criminals in 2017. According to the South East European Law Enforcement Center (SELC), the group hacked the Bulgarian customs agency’s computers and made changes to the system so that their partner companies could import goods while avoiding paying taxes on them.
Immediately following the crackdown, the bitcoin seized was worth about $500,000, however, it would now be worth closer to $6 billion dollars, as of April 2023. While the details around the BTC seizure are unclear, and it is not totally clear whether the country still holds that bitcoin or what it plans to do with the stack if it does, the potential of a nation like Bulgaria holding this much BTC is worth exploring.
As the value of bitcoin is, in the view of many, set to go up a lot higher still in the coming years, Bulgaria could stand to become very wealthy.
THE RISING PRICE OF BULGARIA’S BITCOIN
While the future price of bitcoin is impossible to predict, there are some prominent examples of experts explaining why they are confident Bulgaria’s bitcoin holdings will grow exponentially in value.
Jesse Meyers, the COO of Onramp Bitcoin who holds an MBA from Stanford University, has predicted that the bitcoin price will hit $10 million in the coming decades. Ark Invest CEO Cathie Wood has predicted bitcoin will reach $1 million by 2030 in a bullish scenario. Similarly, Arthur Hayes, co-founder of BitMex believes that bitcoin could hit $1 million by 2026.
While most people don’t believe that the bitcoin price can reach $1 million by then, anything is possible. For example, if there was an extended banking crisis and hyperinflation of the U.S. dollar, as predicted by Srinivasan, who knows how valuable Bulgaria’s bitcoin stack will become?
For instance, shortly after Srinivasan’s bet (although this was certainly unrelated), several nations, including China, Russia, Saudi Arabia and Kenya and more began moving away from using the U.S. dollar in their trades, With the Kenyan president warning citizens to get rid of their dollar holdings.
The United States government has measures in place to prevent further bank runs, like the Federal Reserve’s $25 billion bank-term funding program (BTFP) and the Federal Deposit Insurance Corporation’s (FDIC’s) openness to cover all deposits.
I think, if the FDIC decides to insure all deposits, that will be enough to deter true bank runs, but it’s clear that the U.S. dollar is not as strong as it used to be. And that opens the door for a decentralized, global monetary unit like bitcoin to rise.
As a result, if Bulgaria holds onto its BTC stash, it could amass more value relative to the holdings of other countries around the world and become one of the world’s richest.
SO, WHAT WILL BULGARIA DO WITH ITS BITCOIN?
Bulgaria could use future bitcoin gains to invest in its economy, but it will have to pay off national debts first. As of 2022, Bulgaria’s national government debt reached $20 billion in 2022.
By 2030, if the bitcoin price hits $1 million and it still holds its seized, 213,000 BTC stash, its holdings could be worth $213 billion.
After paying off its debt, Bulgaria could use the funds generated from selling the 231,000 BTC to invest in various industries, such as technology or real estate. Moreover, the Bulgarian government could use the funds generated from the sale of its bitcoin to improve the country’s infrastructure, education and healthcare. By investing in these essential sectors, Bulgaria could attract foreign investment, and this would further boost the country’s economy.
Bulgaria has a significant opportunity to become one of the wealthiest countries in the world if it HODLs its bitcoin and sells some at the right time. But it seems wise for the country to keep a significant portion of bitcoin in reserve in perpetuity, as fiat currencies like the dollar continue to deteriorate.