The IMF Is “Waking Up” To Bitcoin, Says Bitwise CIO
The International Monetary Fund (IMF) is warming up to Bitcoin’s merits after years of criticizing and discouraging the use of crypto at large, according to crypto fund manager Bitwise.
In a Twitter thread published on Monday, Bitwise CIO Matt Hougan dug into a 43-page paper published by three IMF researchers on April 5, which examined academic literature to assess Bitcoin as a medium of cross-border value transfer.
The paper presented on-chain and off-chain measures of international Bitcoin flows and found that such flows respond differently to traditional drivers. Specifically, the magnitude of cross-border Bitcoin transfers appears high in several countries with respect to their GDP – especially ones that typically experience small capital flows.
“It makes sense,” Hougan wrote. “People in countries facing either capital controls or limited access to the global economy are using Bitcoin as a release valve.”
Takeaway #1: Countries that have limited access to the broader global economy are big users of bitcoin on a relative basis.
The paper notes: “The magnitudes of the estimated Bitcoin cross-border flows are sizeable with respect to several countries’ GDP, especially in those…
— Matt Hougan (@Matt_Hougan) April 22, 2024
The executive highlighted that the United States’ relatively low adoption of Bitcoin as a tool for capital flows does not capture the reality of its use across the globe – and is, in fact, an extreme outlier compared to other countries.
For example, Chainalysis data shows that cross-border on-chain Bitcoin flows in Venezuela averaged 0.8% of GDP between 2019 and 2022, versus less than 0.1% of GDP in Canada or the USA.
In general, on-chain cross-border flows align with crypto-specific sentiment, including a
